Federal Court Halts Trump's Effort to Dismiss Fed Governor Before Rate Cut Meeting

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A federal appeals court on Monday night dismissed President Donald Trump’s emergency bid to fire Federal Reserve Governor Lisa Cook, a ruling that comes hours before a key two-day meeting, where the central bank is set to make a decision on interest rates.

Federal Reserve Board of Governors member Lisa Cook listens during an open meeting of the Board of Governors at the Federal Reserve.

Key Facts

In a 2-1 ruling, the U.S. Court of Appeals for the District of Columbia Circuit upheld a lower court’s decision allowing Cook to continue serving in her role while her legal challenge against the attempted removal proceeds.

The ruling means Cook will likely be able to attend the Federal Reserve’s two-day meeting, unless the Trump administration asks the Supreme Court to intervene.

Writing the concurring opinion, Biden appointee Judge Bradley Garcia noted that granting the government’s emergency request to allow for her removal would “upend, not preserve, the status quo” as it could “introduce the possibility of ‘the disruptive effect of the repeated removal and reinstatement’ of Cook during this litigation”

The judge then added: “Given that Cook has a property interest in her position, she is entitled to ‘some kind’ of process before removal,” adding that even the Trump administration did not dispute the fact that “it provided Cook no meaningful notice or opportunity to respond to the allegations against her.”

The ruling upholds a decision made last week by D.C. federal judge Jia Cobb, who found that “Cook has made a strong showing that her purported removal was done in violation of the Federal Reserve Act’s ‘for cause’ provision.”

What Do We Know About Stephen Miran’s Appointment?

As the litigation over Trump’s firing of Cook proceeds, Trump’s economic adviser Stephen Miran is set to join the Federal Reserve board after the Senate cleared his nomination in a vote on Monday. The vote to approve Miran’s nomination passed 48-47, along party lines, with Democrats expressing concern about the appointment impacting the central bank’s independence. Last week, Sen. Elizabeth Warren referred to Miran as a “Donald Trump puppet” and warned that he would help the president “undermine the independence and seize control of the Fed.”

What Do We Know About Trump’s Attempt To Fire Cook?

Late last month, Trump announced he was moving to fire Cook, alleging that she had engaged in mortgage fraud. The president, who has clashed with the Federal Reserve over interest rate cuts, shared a copy of a letter he sent to Cook, which argued that the Federal Reserve Act allows him to remove governors at his discretion “for cause” and adds that he has “determined that there is sufficient cause to remove you from your position.” The president’s letter raised allegations made by Federal Housing Finance Agency Director Bill Pulte that Cook had committed mortgage fraud by claiming two properties as her primary residence. In response, Cook questioned the legality of Trump’s action and said: “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so. I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”