Court Blocks Trump’s Removal Effort Ahead of Rate Vote
An appeals court ruled Monday that Lisa Cook can remain a Federal Reserve governor, rebuffing President Donald Trump’s efforts to remove her just ahead of a key vote on interest rates. In a 2-1 decision, the court found that Cook’s due process rights were violated because the administration did not give her a formal opportunity to respond to the charges.
The Trump administration is expected to quickly turn to the Supreme Court in a last-ditch bid to unseat Cook. Cook’s lawsuit seeking to permanently block her firing must still make its way through the courts.
Fed Meeting and Rate Decision
The Fed’s next two-day meeting begins Tuesday with all seven governors and 12 regional bank presidents present. Twelve of those 19 officials will vote on the central bank’s short-term rate. Chair Jerome Powell signaled last month the Fed would likely cut its key rate from about 4.3% to 4.1%. Borrowing costs, such as mortgage rates and car loans, have already declined in anticipation of the move.
Independence and Political Pressure
The White House campaign to unseat Cook marks an unprecedented attempt to reshape the Fed, which has long been designed to operate independently from day-to-day politics. No president has ever fired a sitting Fed governor in the agency’s 112-year history. Legal scholars warn that undermining the Fed’s independence could allow political influence to dictate interest-rate decisions, risking higher inflation and long-term borrowing costs.
Trump has repeatedly pressured Powell and the Fed for deeper rate cuts, suggesting a target as low as 1.3%—a level few economists support.
Allegations Against Cook
Trump sought to fire Cook on Aug. 25, citing claims from Trump appointee Bill Pulte that she misrepresented property ownership in 2021, before joining the Fed. Cook has denied the allegations and has not been charged with a crime.
Documents obtained by The Associated Press appear to undercut the administration’s claims. Cook described her Atlanta condo as a “vacation home” in a loan estimate and as a “2nd home” in a security clearance form. Last week, U.S. District Court Judge Jia Cobb ruled that governors can only be removed “for cause” related to misconduct while in office, a standard not met since Cook did not join the board until 2022.
Senate Confirms Trump Nominee Stephen Miran
Separately, Senate Republicans on Monday confirmed Stephen Miran to an open Fed seat. Miran chairs the White House’s Council of Economic Advisers and will take unpaid leave from that role while serving. It is the first time in decades that a sitting executive branch official will also serve on the Fed. His term runs until January but could extend if no replacement is chosen.
Cook’s Historic Role
Cook is the first Black woman to serve as a Federal Reserve governor. A Marshall Scholar, she earned degrees from Oxford University and Spelman College and previously taught at Michigan State University and Harvard’s Kennedy School of Government.
