A federal judge on Tuesday temporarily blocked President Donald Trump from firing Federal Reserve Governor Lisa Cook, marking an early setback for the White House in a legal battle over the central bank’s independence.
The ruling ensures Cook, the first Black woman to serve as a Fed governor, will remain on the board and participate in the Fed’s upcoming September policy meeting unless the order is overturned on appeal.
Judge’s Ruling
U.S. District Judge Jia Cobb issued a temporary restraining order directing Fed Chair Jerome Powell and the Board of Governors to allow Cook to continue her work.
Jia Cobb
“The public interest in Federal Reserve independence weighs in favor of Cook’s reinstatement,” Cobb wrote, stressing that independence is critical for stability in the banking system.
She found the Trump administration’s allegations of “mortgage fraud” before Cook took office did not appear to constitute legal grounds for removal.
White House Pushback
The Justice Department quickly appealed the ruling, though it remains unclear how soon the case will be heard.
Donald Trump
White House spokesperson Kush Desai defended Trump’s decision to remove Cook, calling it a lawful move based on “credible allegations.”
“This ruling will not be the last say on the matter,” Desai said. “The Trump Administration will continue to work to restore accountability and confidence in the Fed.”
Cook’s Defense
Cook has denied any wrongdoing.
Lisa Cook
“Governor Cook did not ever commit mortgage fraud,” her lawyers wrote in court filings.
Her attorney, Abbe Lowell, said Tuesday’s ruling “reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference.”
Allegations
The allegations stem from claims that Cook inaccurately reported property information on mortgage applications prior to her Senate confirmation in 2022.
Trump and William Pulte, the president’s appointee to lead the Federal Housing and Finance Authority, argue the errors amounted to mortgage fraud.
The Justice Department has opened a criminal probe, with subpoenas reportedly issued in Georgia and Michigan.
What’s Next
Cook is expected to take part in the Fed’s Sept. 16–17 meeting, where the central bank is widely expected to cut interest rates.
Her lawsuit argues that Trump’s move was retaliation for her policy positions, not misconduct.
The restraining order remains in place while the case proceeds, but the final decision could reshape the balance between the White House and the Fed.
The case could reach the U.S. Supreme Court and determine how much protection Fed governors have from political pressure.
The outcome has major implications for the Fed’s ability to set interest rates independently of the White House.
Trump has repeatedly demanded steep rate cuts, accusing Fed Chair Powell of mishandling policy.
