Judge Blocks Trump’s Attempt to Fire Federal Reserve Governor Lisa Cook

A federal judge in Washington has blocked President Donald Trump from removing Federal Reserve Governor Lisa Cook, ruling that the president’s attempt likely violated legal protections for the central bank’s independence.

U.S. District Judge Jia Cobb issued a preliminary injunctionpreliminary injunctionA preliminary injunction is a temporary court order issued before a case is finally decided that requires a party to take or stop an action while the litigation continues. Federal courts generally consider the likelihood of success, irreparable harm, the balance of equities, and the public interest before granting one.Read more → late Tuesday, finding that Cook’s claim of improper dismissal had a strong likelihood of success. The decision requires that Cook, a Biden appointee, remain on the Board of Governors while the case continues.

The Federal Reserve Act permits removal of governors only “for cause,” a safeguard designed to shield the institution from political influence. The Trump administration argued that allegations of mortgage fraud, now under investigation, provided grounds for dismissal. Cobb rejected that reasoning, concluding that removal must be tied to conduct directly affecting a governor’s ability to carry out official duties. She also dismissed the administration’s claim that the president’s removal decisions cannot be reviewed by the courts, calling such an argument inconsistent with the law. Cobb wrote that such a position would effectively allow the White House to sidestep legal protections by recasting policy disagreements as misconduct. “Such a rule would provide no practical insulation for the members of the Board of Governors,” she stated.

Cook’s attorneys said the ruling reaffirmed the principle that the Federal Reserve must operate free from political control. “Allowing the President to unlawfully remove Governor Cook on unsubstantiated and vague allegations would endanger the stability of our financial system and undermine the rule of law,” attorney Abbe Lowell said in a statement.

The dispute highlights an ongoing conflict between the Trump administration and the Federal Reserve, which the president has frequently criticized over its handling of interest rates. Earlier this year, Trump considered removing Chair Jerome Powell but backed down after advisers warned it could destabilize financial markets. By targeting Cook instead, the White House aimed to shift the balance on the seven-member Board, where a successful removal would leave only two governors appointed by a Democratic president.

The injunction ensures that Cook will remain in her post as the Federal Reserve prepares for its September 16 policy meeting, where officials are expected to consider the first interest rate cut since last year. The administration is expected to appeal the ruling.