An appeals court on Monday ruled that Lisa Cook can remain a Federal Reserve governor, rejecting President Donald Trump’s attempt to remove her just days before a crucial vote on interest rates.
The Trump administration is now expected to turn to the Supreme Court in a last attempt to oust Cook before the Fed’s two-day policy meeting begins Tuesday. Meanwhile, Cook’s separate lawsuit to permanently block her dismissal will continue moving through the courts.
The effort to fire Cook marks an unprecedented move in the Fed’s 112-year history. No president has ever removed a sitting Fed governor, as the institution was structured to remain independent from day-to-day politics. The ruling also comes as the Senate confirmed Trump nominee Stephen Miran to another open seat on the board.
Trump initially tried to fire Cook on August 25. A federal judge deemed the move unlawful and reinstated her, but controversy has continued. Bill Pulte, a Trump appointee, accused Cook of mortgage fraud for allegedly declaring two properties as “primary residences” in 2021. Cook has strongly denied the allegation.
The case has sparked concerns that the central bank’s independence could be undermined. Economists warn that weakening the Fed’s autonomy may limit its ability to take politically unpopular but necessary steps, such as raising interest rates to tackle inflation.
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