US Judge Blocks Trump’s Attempt to Remove Fed Governor Lisa Cook
TOI World Desk | Sep 10, 2025, 19:16 IST
A federal judge has temporarily blocked President Trump from removing Federal Reserve Governor Lisa Cook, ruling that mortgage fraud allegations predating her Senate confirmation do not constitute valid grounds for dismissal. The case, likely headed to the Supreme Court, could set a precedent for the independence of the Federal Reserve and the limits of presidential power over monetary policy.
Washington, D.C. A federal judge has temporarily stopped President Donald Trump from removing Federal Reserve Governor Lisa Cook. This case is the first test of whether a president can fire a member of the central bank's board. On Tuesday, U.S. District Judge Jia Cobb ruled that the administration cannot enforce Cook’s dismissal while her lawsuit is ongoing.
Trump announced Cook’s removal on August 25. He claimed she had committed mortgage fraud years before her Senate confirmation in 2022. In her ruling, Judge Cobb stated that the allegations do not meet the criteria for dismissal under the Federal Reserve Act. This act allows governors to be removed only “for cause.” Cobb explained that this means removal must relate to misconduct or performance during their time in office, not actions alleged to have occurred earlier. “President Trump has not identified anything related to Cook’s conduct or job performance as a Board member that would indicate she is harming the Board or the public interest,” Cobb wrote. Cook has denied the allegations and welcomed the ruling as an important protection for central bank independence.
The dispute marks an unprecedented challenge. No U.S. president has ever removed a Federal Reserve governor. The outcome of this case could change the balance of power between the White House and the central bank. Legal experts caution that allowing presidents to dismiss governors could make monetary policy more political, undermining the independence seen as crucial for economic stability.
The political context raises the stakes. Trump has pressured the Federal Reserve to cut interest rates more aggressively and has criticized Fed Chair Jerome Powell for resisting deeper reductions. The central bank may announce a rate cut at its upcoming meeting on September 16–17. Tuesday’s ruling means Cook will participate in that decision.
The administration's case against Cook relies on claims that she misrepresented information on mortgage applications for three properties, securing lower interest rates and tax benefits. Federal Housing Finance Authority Director William Pulte, a Trump appointee, has publicly supported the president’s claims. Meanwhile, the Justice Department has started a criminal investigation, issuing grand jury subpoenas in Georgia and Michigan. Cook maintains she “never committed mortgage fraud” and argues that even if the allegations were true, they occurred before her service and cannot justify her removal under the law.
Cook’s defense is led by attorney Abbe Lowell, who is known for representing Hunter Biden. Lowell praised Judge Cobb’s decision, calling it “a reaffirmation of the importance of protecting the Federal Reserve from unlawful political interference.” However, the White House indicated it would continue pursuing the issue. Spokesman Kush Desai stated that Trump “lawfully removed” Cook and insisted Tuesday’s decision was “only the beginning of a judicial process that will ultimately confirm the president’s authority.” Trump himself did not comment when asked by reporters.
Most observers expect the case to move quickly through the appeals process and possibly reach the U.S. Supreme Court. A final decision could define the limits of presidential power over the Federal Reserve at a time when its independence is crucial for controlling inflation, maintaining market confidence, and navigating the U.S. economy through difficult periods.
Cook, who in 2022 became the first Black woman to serve as a Federal Reserve governor, argues that the move to remove her is retaliation for her defense of the Fed’s autonomy. Economists warn that weakening the central bank’s independence could destabilize global markets, erode confidence in U.S. monetary policy, and permanently alter how America manages one of its most powerful institutions.
Trump announced Cook’s removal on August 25. He claimed she had committed mortgage fraud years before her Senate confirmation in 2022. In her ruling, Judge Cobb stated that the allegations do not meet the criteria for dismissal under the Federal Reserve Act. This act allows governors to be removed only “for cause.” Cobb explained that this means removal must relate to misconduct or performance during their time in office, not actions alleged to have occurred earlier. “President Trump has not identified anything related to Cook’s conduct or job performance as a Board member that would indicate she is harming the Board or the public interest,” Cobb wrote. Cook has denied the allegations and welcomed the ruling as an important protection for central bank independence.
The dispute marks an unprecedented challenge. No U.S. president has ever removed a Federal Reserve governor. The outcome of this case could change the balance of power between the White House and the central bank. Legal experts caution that allowing presidents to dismiss governors could make monetary policy more political, undermining the independence seen as crucial for economic stability.
The political context raises the stakes. Trump has pressured the Federal Reserve to cut interest rates more aggressively and has criticized Fed Chair Jerome Powell for resisting deeper reductions. The central bank may announce a rate cut at its upcoming meeting on September 16–17. Tuesday’s ruling means Cook will participate in that decision.
The administration's case against Cook relies on claims that she misrepresented information on mortgage applications for three properties, securing lower interest rates and tax benefits. Federal Housing Finance Authority Director William Pulte, a Trump appointee, has publicly supported the president’s claims. Meanwhile, the Justice Department has started a criminal investigation, issuing grand jury subpoenas in Georgia and Michigan. Cook maintains she “never committed mortgage fraud” and argues that even if the allegations were true, they occurred before her service and cannot justify her removal under the law.
Cook’s defense is led by attorney Abbe Lowell, who is known for representing Hunter Biden. Lowell praised Judge Cobb’s decision, calling it “a reaffirmation of the importance of protecting the Federal Reserve from unlawful political interference.” However, the White House indicated it would continue pursuing the issue. Spokesman Kush Desai stated that Trump “lawfully removed” Cook and insisted Tuesday’s decision was “only the beginning of a judicial process that will ultimately confirm the president’s authority.” Trump himself did not comment when asked by reporters.
Most observers expect the case to move quickly through the appeals process and possibly reach the U.S. Supreme Court. A final decision could define the limits of presidential power over the Federal Reserve at a time when its independence is crucial for controlling inflation, maintaining market confidence, and navigating the U.S. economy through difficult periods.
Cook, who in 2022 became the first Black woman to serve as a Federal Reserve governor, argues that the move to remove her is retaliation for her defense of the Fed’s autonomy. Economists warn that weakening the central bank’s independence could destabilize global markets, erode confidence in U.S. monetary policy, and permanently alter how America manages one of its most powerful institutions.