A high-stakes legal showdown began Friday in Washington as Federal Reserve Governor Lisa Cook asked a judge to block President Donald Trump from firing her — in what could become a defining test of the Fed’s independence.
Cook, the first Black woman to serve on the Fed’s seven-member Board of Governors, was in court seeking a temporary restraining order to stop Trump from removing her while her lawsuit plays out. She argues that Trump has no legal grounds to oust her before her term ends in 2038.
Trump, however, says Cook should go — pointing to allegations of mortgage fraud tied to properties in Michigan, Georgia, and Massachusetts. His lawyers argue that the president has broad authority to remove Fed governors “for cause,” and that the alleged misconduct is enough to justify her firing.
Cook’s attorney, Abbe Lowell, pushed back hard, telling US District Judge Jia Cobb that the claims are nothing more than a smear campaign led by Bill Pulte, Trump’s pick to lead the Federal Housing Finance Agency. Pulte has flooded social media with accusations against Cook and claims to have filed multiple referrals to the Justice Department.
“Nothing in these vague, unsubstantiated allegations has any relevance to Gov. Cook’s role at the Federal Reserve,” Lowell said. “You can’t have Director Pulte’s midnight tweets be the cause.”
The central bank itself filed a brief saying it would take no side in the fight — but urged the judge to rule quickly to remove “the existing cloud of uncertainty” hanging over the Fed. If Cook is fired, Trump would be able to name his fourth pick to the Board, giving him a majority at a time when he has loudly pressured the Fed to slash interest rates.
Judge Cobb, an appointee of President Joe Biden, acknowledged the gravity of the case:
“This obviously raises some important questions that may be of first impression, particularly as it applies to this board.”
The case has implications far beyond Cook’s personal future. No president has ever removed a Fed governor before. The law says governors can only be removed “for cause” — but it doesn’t define what that means. If Trump succeeds, it could reshape the balance of power between the White House and the Fed, rattling global markets that rely on the US central bank’s independence.
Already, the dollar has slipped against major currencies amid uncertainty.
Cook, who joined the Board in 2022 after being nominated by Biden, says that even if the mortgage allegations were true, they predate her service and cannot be used as grounds for removal. Trump’s lawyers counter that fraud goes to integrity — and integrity is fair game.
Judge Cobb is moving quickly, setting an expedited schedule for filings. If she rules in Cook’s favor, Trump’s team can appeal. If she sides with Trump, Cook’s camp will likely escalate. Either way, most experts expect the dispute to end up at the Supreme Court, which has already signaled interest in how much insulation the Fed enjoys from presidential pressure.
For now, Cook remains in her office — but with her job, and the Fed’s independence, hanging in the balance.
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