September 10, 2025
If Cook is removed from her seat, Trump will have the room to nominate her successor, which would mean a majority of the Fed’s seven governors would be nominated by the controversial Republican leader.
As Federal Reserve Governor Lisa Cook filed a lawsuit against President Donald Trump, challenging his attempts to remove her from her post, a federal judge blocked his efforts, citing “a strong showing that her purported removal was done in violation of the Federal Reserve Act’s ‘for cause’ provision,” CNBC reports.
In a preliminary injunction banning the President from terminating Cook, U.S. District Court Judge Jia Cobb defined what the provision outlined, saying “the best reading” of it is that there needs to be a legal cause related to their “behavior in office” to remove a Fed governor. ″‘For cause’ thus does not contemplate removing an individual purely for conduct that occurred before they began in office,” Cobb, who is a Black woman, wrote.
Cook filed a lawsuit after Trump proposed the idea to have her fired following allegations from Federal Housing Finance Agency Director Bill Pulte, claiming the first Black female Fed governor engaged in mortgage fraud by signing documents for two properties she owns. Denying any and all wrongdoing, Cook allegedly signed those documents prior to joining the agency.
According to Politico, federal law grants the President of the United States the power to fire members of the Federal Reserve Board of Governors “for cause,” correlating to allegations of serious misconduct or malfeasance on the job. Trump used the mortgage fraud claims as cause to fire Cook; however, Cobb, who was appointed to the seat by a former President Joe Biden appointee, labeled the allegation as a weak, unproven claim that cannot justify termination.
Cook’s lawyer, Abbe Lowell, released a statement celebrating the block, saying Trump’s attempt would “endanger the stability of our financial system.” “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,” Lowell said.
“Governor Cook will continue to carry out her sworn duties as a Senate-confirmed Board Governor.”
Of course, the White House feels differently, with spokesperson Kush Desai calling his boss’s attempt to have Cook fired “lawful” and pushing it would improve accountability for the Fed. “The President determined there was cause to remove a governor who was credibly accused of lying in financial documents from a highly sensitive position overseeing financial institutions,” Desai said.
“The removal of a governor for cause improves the Federal Reserve Board’s accountability and credibility for both the markets and American people.”
This isn’t the first attack on the Fed or its governing board from the indicted commander-in-chief. After his unsuccessful pressure on the agency and its chair, Jerome Powell, to cut interest rates, Trump once considered firing Powell. With Cook still in place, she will be able to participate in the Fed’s next two-day meeting scheduled to begin Sept. 16, where the bank is expected to cut its overnight borrowing rate.
The final say in the decision is expected to land in the hands of the Supreme Court, marking the first time ever that a sitting president has attempted to fire a Fed governor for purported cause.
If Cook is removed from her seat, Trump will have the room to nominate her successor, which would mean a majority of the Fed’s seven governors would be nominated by the controversial Republican leader. Another part of the agenda for the upcoming meeting is to vote on the nomination of Stephen Miran, the chair of the Council of Economic Advisers, to the board to fill the seat of Adriana Kugler, whose August 2025 resignation sent shockwaves.
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