White House Blocks Removal of Fed Governor Cook After Court Ruling

In a landmark legal decision, the U.S. Court of Appeals for the District of Columbia Circuit has upheld a lower court's injunction preventing President Donald Trump from removing Federal Reserve Governor Lisa Cook. This ruling marks the first time in the Federal Reserve's history that a president has attempted to dismiss a sitting governor, highlighting the ongoing tension between executive authority and the central bank's independence.

The appeals court's 2-1 decision, issued on September 15, 2025, concluded that the Trump administration's allegations of mortgage fraud against Cook did not meet the legal standard required for removal under the Federal Reserve Act. The majority opinion, authored by Judges Bradley Garcia and J. Michelle Childs—both appointed by President Joe Biden—emphasized that Cook had been denied due process, as she was not given prior notice or an opportunity to respond to the allegations before the removal attempt was made public.

Cook, who was appointed to the Federal Reserve Board of Governors by President Biden in 2022, has denied the allegations, asserting that she did not commit mortgage fraud. Her legal team has argued that the removal attempt was politically motivated, aiming to influence the Federal Reserve's policy decisions. The court's ruling allows Cook to remain in her position during the ongoing legal proceedings.

The Trump administration has announced plans to appeal the decision to the U.S. Supreme Court, seeking clarification on the extent of presidential authority over independent federal agencies. The outcome of this case could have significant implications for the future of the Federal Reserve and its ability to operate free from political interference.

As the legal battle continues, the Federal Reserve's upcoming policy meetings and decisions on interest rates remain under scrutiny. The central bank's independence is a cornerstone of its credibility and effectiveness in managing the U.S. economy, and this case underscores the importance of safeguarding that autonomy against external pressures.