Embattled Federal Reserve Governor Lisa Cook has won a temporary reprieve in her fight to remain on the board after a federal judge blocked President Donald Trump’s attempt to remove her.
In a ruling issued late Tuesday, U.S. District Judge Jia Cobb granted Cook a preliminary injunction that allows her to continue serving while her lawsuit moves through the courts. Cobb concluded that Cook is likely to prevail in her challenge and emphasized that the allegations against her do not constitute sufficient legal grounds for dismissal.
The White House announced on August 25 that Trump was firing Cook, citing claims she committed mortgage fraud in connection with properties purchased in Ann Arbor, Michigan, and Atlanta in 2021, before joining the Fed. Officials alleged that she declared both homes as “primary residences,” which may have secured her lower down payments and interest rates.
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“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,” White House spokesman Kush Desai said in response to the ruling. “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.”
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Cobb, who was appointed by President Joe Biden, rejected that argument. She wrote that federal law allows governors to be removed only “for cause,” meaning conduct tied directly to their official duties, not allegations from before they assumed office. “President Trump has not stated a legally permissible cause for Cook’s removal,” the decision stated.
Cook will now take part in the Fed’s September 16–17 policy meeting, where officials are expected to lower the benchmark short-term rate by a quarter point to a range between 4 and 4.25 percent.
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Cook’s attorney, Abbe Lowell, welcomed the decision. “Allowing the President to unlawfully remove Governor Cook on unsubstantiated and vague allegations would endanger the stability of our financial system and undermine the rule of law,” he said. “Governor Cook will continue to carry out her sworn duties as a Senate-confirmed Board Governor.”
The court also instructed Fed Chair Jerome Powell and the board of governors to recognize Cook as an active member while the litigation continues.
The case is historically significant because no president has ever attempted to fire a Federal Reserve governor. Economists fear that undermining the Fed’s independence could lead to political interference in monetary policy, creating inflationary risks if interest rates are kept artificially low.
If Trump succeeds, he could reshape the central bank’s leadership. With two of his earlier appointees already on the board, replacing Cook would give him a 4–3 majority. The administration is also pushing the Senate to confirm Stephen Miran, a White House economic adviser, to fill another vacancy. Trump has said he intends to appoint only officials who will back deeper rate cuts.
The central bank’s benchmark rate now stands at 4.3 percent after a full percentage point reduction last year. Trump has argued it should be closer to 1.3 percent, a position widely rejected by Fed officials and most economists.
Cook, the first Black woman to serve as a Federal Reserve governor, joined the board in 2022 after a career in academia. A Marshall Scholar, she studied at Oxford and Spelman before teaching at Michigan State University and Harvard’s Kennedy School of Government.
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