MSU economist and Board of Governors of the Federal Reserve member Lisa Cook addresses the Class of 2023, Friday, May 5, 2023, during the Michigan State University 2023 Spring Commencement at the Breslin Center in East Lansing
A federal appeals court on Monday dealt President Trump a major setback in his effort to fire Federal Reserve Governor Lisa Cook, ruling she can remain in her post and participate in this week’s pivotal Fed meeting on interest rates. The case has attracted widespread attention because it strikes at the independence of the central bank itself. Trump accused Cook of mortgage fraud, though she has not been charged with any crime, and argued this gave him “cause” to remove her. Cook sued, saying her dismissal violated the law and her right to due process. The D.C. Circuit Court sided with her for now.
Cook’s Position on the Line
Lisa D. Cook, a member of the Board of Governors of the Federal Reserve System, talks to the Detroit Economic Club during a luncheon at the Masonic Temple in Detroit on Wednesday, Nov. 30, 2022.
Lisa Cook, confirmed to the Fed in 2022, made history as the first Black woman on the Board of Governors. Trump sought to oust her just weeks before a critical Fed meeting, claiming she falsified mortgage records years before joining the bank. Cook’s attorneys argued that even if those allegations were true, they did not amount to “cause” under the law that governs dismissals of Fed officials.
What the Appeals Court Said
The Shelby County Courthouse is seen in Downtown Memphis on July 22, 2025.
Two of the three judges on the D.C. Circuit rejected Trump’s request for emergency relief. They wrote that granting his demand would “upend, not preserve, the status quo,” since Cook has continued to serve and vote while the case proceeds. They also highlighted her argument that she was denied even minimal process before being fired — no real notice of the allegations, no chance to respond — and said she had a “strong likelihood of success” on those claims.
Political Stakes and Market Risks
Jerome Powell, Chair of the Federal Reserve, speaks to the Senate Banking, Housing, and Urban Affairs committee in regards to The Federal Reserve’s Semi-Annual Monetary Policy Report on Feb. 11, 2025.
The legal fight comes as the Fed prepares to lower interest rates, a move with massive implications for households, businesses, and the broader economy. Trump has railed against the Fed for keeping borrowing costs high, calling Chair Jerome Powell a “numbskull” and “major loser.” Economists warn that if presidents can fire Fed governors at will, investor confidence could collapse and the central bank’s independence — long a cornerstone of economic stability — would evaporate.
A First in Fed History?
President Donald Trump giving remarks at a memorial event at the Pentagon alongside U.S. Defense Secretary Pete Hegseth, center, and Air Force Gen. Dan Caine, chairman of the Joint Chiefs of Staff, right, on the anniversary of the 9/11 terror attacks on Sept. 11, 2025, in Arlington, VA on Sept. 11, 2001, American Airlines Flight 77 was deliberately crashed into the Pentagon, killing 184 people.
If Trump ultimately succeeds, it would mark the first time in the Fed’s 111-year history that a sitting governor was removed by a president. For now, Cook will keep her seat, cast her votes, and continue her term. But the administration has vowed to appeal, keeping the case alive. White House spokesperson Kush Desai said in a statement, “The President lawfully removed Lisa Cook for cause. The Administration will appeal this decision and looks forward to ultimate victory.”
Cook’s Future and What Comes Next
The preamble to the United States Constitution, at the top of an original signed official ratification copy of the Constitution, photographed Sept. 16, 2024. The document, which was discovered in a North Carolina filing cabinet in 2022, will be auctioned Sept. 28th.
Cook’s defense rests on the idea that Trump is attempting to stretch the definition of “cause” beyond recognition, turning it into a political tool. Her attorneys say the Constitution, precedent, and the Fed’s own statute say that presidents cannot bend the rules to punish officials with whom they disagree. The ruling means Cook will remain at the table as the Fed deliberates.
