A US federal judge on Tuesday temporarily blocked President Donald Trump’s attempt to remove Federal Reserve (Fed) board member Lisa Cook from her position, handing him a legal setback in his clash with the country’s central bank.
District court judge Jia Cobb granted Cook’s request for a preliminary injunction, ruling that the US president may only dismiss Fed governors “for cause” and that alleged conduct predating her appointment could not justify removal. The judge also stressed the public interest in maintaining the Fed’s independence.
Trump said in August he was removing Cook immediately, citing allegations she made false statements in one or more mortgage applications.
Cook, an economist, denied the accusations and argued that Trump lacked authority to dismiss her. Through her lawyers, she said even if errors had been made, they related to a private mortgage years before she took office.
Cook was first appointed to the Fed’s board of governors in 2022 by then-president Joe Biden and confirmed by the US Senate.
The ruling underscores tensions between Trump and the Fed. The US president has repeatedly called for interest rate cuts and urged Fed Chair Jerome Powell to resign. He has now targeted Cook.
Legal experts expect the dispute to ultimately reach the US Supreme Court. The Fed plays a pivotal role in setting monetary policy for the world’s largest economy, with global implications for financial stability.