A federal judge ruled late Tuesday that Federal Reserve Governor Lisa Cook can remain in her position during the legal fight over President Trump’s attempt to fire her.
U.S. District Judge Jia Cobb issued a preliminary injunction that bars Ms. Cook’s removal and enjoins the Fed or its chairman, Jerome Powell, from carrying out any attempt by Mr. Trump to oust her.
“This ruling recognizes and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference,” Ms. Cook’s lawyer, Abbe Lowell, said. “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.”
Mr. Trump could appeal the ruling as he attempts to shape the Fed to his liking.
The president fired Ms. Cook on Aug. 25 based on allegations she might have committed mortgage fraud.
A federal housing finance regulator, Bill Pulte, pointed to documents showing Ms. Cook in 2021 listed properties in Michigan and Georgia as her primary residences.
Ms. Cook hasn’t fully explained why she listed both as primary residences, but in a lawsuit, she argued she never intended to commit fraud and the allegations are a pretext for Mr. Trump to stock the Fed with allies.
Ms. Cook’s removal and replacement, alongside confirmation of a pending governor nominee, would give the White House a Trump-appointed majority on the Fed board as he seeks lower interest rates from central bankers.
Mr. Trump says lower rates are warranted and would give borrowers better terms and juice the economy.
He’s railed against Mr. Powell as “too late” in making critical decisions.
The Fed is expected to cut rates by at least 25 basis points, or 0.25%, at its meeting this month due to a slowdown in hiring.
