Federal Court Upholds Lisa Cook's Position Against Trump's Dismissal

Tue Sep 23 2025 09:07:09 GMT+0300 (Eastern European Summer Time)

A federal appeals court has ruled in favor of Federal Reserve governor Lisa Cook, preventing President Trump from firing her based on unsubstantiated claims of fraud, ensuring her role in crucial monetary policymaking.

In a significant ruling, a federal appeals court has blocked President Trump's attempt to dismiss Lisa Cook, a Federal Reserve governor, asserting that the president lacks the authority for such a move. This ruling is pivotal as it comes ahead of crucial Fed meetings expected to involve interest rate cuts. Cook, the first black woman on the Fed board, has claimed her dismissal was politically motivated due to her monetary policy stance. The court's decision highlights the independence of the Federal Reserve amid political pressures.

A federal appeals court has ruled that US President Donald Trump cannot remove Federal Reserve governor Lisa Cook from her position, marking a significant legal victory for Cook and setting a precedent regarding the independence of the Federal Reserve.

The 2-1 decision on Monday prevents Cook from being ousted as she prepares for a crucial policy meeting, where discussions include the expected cut of US interest rates. In August, Trump had announced his intention to fire Cook, alleging involvement in mortgage fraud; Cook has denied the accusations and claimed the president does not have the authority to dismiss her.

This ruling reinforces the Federal Reserve's ability to operate free from political interference, a principle established when the Fed was created in 1913. Historically, no president has succeeded in removing a Fed governor, and legal provisions dictate such actions can only occur 'for cause,' with no clear definition or procedure provided. The Trump administration has indicated it may appeal the ruling to the Supreme Court.

Cook, the first black woman to serve as a Fed governor and appointed by President Biden, has alleged the move to fire her is directly linked to her monetary policy decisions. The Federal Reserve board plays a critical role in shaping US monetary policy, which has become increasingly relevant given the current economic landscape and inflation concerns.

As the Fed has refrained from cutting interest rates up until now to manage inflation—complicated by Trump's tariffs—the expected loosening of monetary policy this week could be vital to stimulating a lagging economy. Trump has publicly criticized the Fed's chair, Jerome Powell, for not implementing aggressive rate cuts, urging immediate action through his social media platform.