A federal appeals court has ruled that Federal Reserve Governor Lisa Cook can remain in her post, allowing her to take part in this week’s closely watched interest rate meeting , despite President Donald Trump’s attempt to remove her from the board. The decision from the US Court of Appeals for the District of Columbia Circuit came on Monday, hours after Trump announced Cook’s dismissal in a letter posted on Truth Social, accusing her of mortgage fraud.
“In light of your deceitful and potentially criminal conduct in a financial matter, [Americans] cannot and I do not have such confidence in your integrity,” Trump wrote. “I have determined that there is sufficient cause to remove you from your position.” Cook, the first Black woman to serve on the Fed’s board, has denied the allegations and pledged not to be “bullied to step down.” She has also filed a lawsuit against the Trump administration, arguing that the accusations are unrelated to her role at the central bank and remain unproven.
The allegations originated with Bill Pulte, head of the Federal Housing Finance Agency, who claimed Cook had listed more than one home as her primary residence in 2021 to secure favourable mortgage terms. The Justice Department has since opened an investigation, with subpoenas issued in Georgia and Michigan, and reports suggesting a grand jury in Atlanta is examining the case. Cook has not been charged, and her legal filing describes the allegations as a pretext to force her out and open a seat for Trump to fill.
Legal experts say the case raises fundamental questions about the independence of the Federal Reserve. Governors can only be removed “for cause,” a standard that historically covers proven misconduct or neglect. Trump’s move marks the first attempt by a president to fire a sitting Fed governor in the institution’s 112-year history, and observers expect the dispute could reach the Supreme Court.
The legal fight comes as the Fed begins a two-day policy meeting, with markets anticipating a rate cut of at least 25 basis points. Investors are watching closely for signals of further easing as the US economy slows and trade talks with China continue.
“In light of your deceitful and potentially criminal conduct in a financial matter, [Americans] cannot and I do not have such confidence in your integrity,” Trump wrote. “I have determined that there is sufficient cause to remove you from your position.” Cook, the first Black woman to serve on the Fed’s board, has denied the allegations and pledged not to be “bullied to step down.” She has also filed a lawsuit against the Trump administration, arguing that the accusations are unrelated to her role at the central bank and remain unproven.
The allegations originated with Bill Pulte, head of the Federal Housing Finance Agency, who claimed Cook had listed more than one home as her primary residence in 2021 to secure favourable mortgage terms. The Justice Department has since opened an investigation, with subpoenas issued in Georgia and Michigan, and reports suggesting a grand jury in Atlanta is examining the case. Cook has not been charged, and her legal filing describes the allegations as a pretext to force her out and open a seat for Trump to fill.
Legal experts say the case raises fundamental questions about the independence of the Federal Reserve. Governors can only be removed “for cause,” a standard that historically covers proven misconduct or neglect. Trump’s move marks the first attempt by a president to fire a sitting Fed governor in the institution’s 112-year history, and observers expect the dispute could reach the Supreme Court.
The legal fight comes as the Fed begins a two-day policy meeting, with markets anticipating a rate cut of at least 25 basis points. Investors are watching closely for signals of further easing as the US economy slows and trade talks with China continue.
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