Trump Seeks Court Approval to Remove Fed Governor Lisa Cook Ahead of Rate Decision

President Donald Trump’s administration has asked a federal appeals court to allow him to remove Federal Reserve Governor Lisa Cook before the Fed’s September 16-17 policy meeting, where interest rate cuts are expected. The Justice Department filed the request after U.S. District Judge Jia Cobb temporarily blocked Cook’s removal earlier this week.

Trump moved to fire Cook in late August, accusing her of mortgage fraud. Cook has denied the allegations and filed a lawsuit claiming the move is politically motivated, arguing presidents cannot dismiss Fed governors for policy differences. Her attorneys warned that removing her now could disrupt financial markets and undermine the central bank’s independence.

The legal battle raises critical questions about the Federal Reserve’s ability to operate free from political influence. The law allows governors to be removed “for cause,” but the term is undefined and has never been tested in court. No U.S. president has previously attempted to remove a Fed governor.

Judge Cobb ruled that the public’s interest favors maintaining the Fed’s independence, adding that Cook’s alleged misconduct occurred before her 2022 Senate confirmation and does not qualify as grounds for removal. Still, the DOJ argued that firing Cook would strengthen trust in the Fed rather than weaken it.

Trump has repeatedly demanded aggressive interest rate cuts and has criticized Fed Chair Jerome Powell. Cook, since joining in 2022, has consistently voted with the Fed majority on both rate hikes and cuts.

The case, expected to reach the Supreme Court, could set a historic precedent for presidential authority over independent financial institutions. Meanwhile, Reuters reported that the Justice Department has launched a criminal probe into Cook’s mortgage filings, intensifying the political and legal stakes surrounding her future at the Fed.