A US federal judge has stopped President Donald Trump from removing Federal Reserve governor Lisa Cook, in a ruling seen as a major victory for the central bank’s independence.
Trump had announced last month that he had sacked Ms Cook, but the Federal Reserve insisted she remained on its board, which helps set US interest rates.
Judge Jia Cobb, delivering her ruling in Washington, said the president failed to provide any legal grounds for Cook’s dismissal.
“President Trump has not identified anything related to Cook’s conduct or job performance that would indicate she is harming the board or the public interest by executing her duties unfaithfully or ineffectively,” the judge wrote.
The Fed declined to comment directly but has previously said it would abide by the court’s decision.
The White House, however, reacted with defiance. In a statement, it said: “This ruling will not be the last say on the matter, and the Trump administration will continue to work to restore accountability and confidence in the Fed.”
Lisa Cook’s lawyer, Abbe David Lowell, hailed the decision, saying it underscored the need to shield the US central bank from political control.
“This ruling recognises and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference. Governor Cook will continue to carry out her sworn duties as a Senate-confirmed board governor.”
Case Could Reshape Fed’s Autonomy
Cook had earlier filed suit against Trump over his attempt to remove her, setting up a potentially landmark case that may reach the US Supreme Court. Legal analysts warn the outcome could reshape the protections around the Fed’s autonomy.
Trump and William Pulte, director of the Federal Housing and Finance Authority, have accused Cook of misstating details of three properties on mortgage applications, allegedly securing lower interest rates and tax credits. The White House said the president acted lawfully.
“President Trump lawfully removed Lisa Cook for cause due to credible allegations of mortgage fraud from her highly sensitive position overseeing financial institutions on the Federal Reserve board of governors,” a spokesperson said.
The Federal Reserve Act stipulates that governors may only be removed “for cause” but does not clearly define the term. Judge Cobb clarified that the phrase applied only to a governor’s conduct while in office.
“The best reading of the ‘for cause’ provision is that the bases for removal of a member of the board of governors are limited to grounds concerning a governor’s behaviour in office and whether they have been faithfully and effectively executing their statutory duties,” she wrote.
She added: “‘For cause’ thus does not contemplate removing an individual purely for conduct that occurred before they began in office.”
This case is the first time in US history that a president has tried to fire a Federal Reserve governor. Analysts say the decision could have far-reaching implications for the bank’s ability to set monetary policy without political interference.
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