U.S. President Donald Trump has been temporarily blocked from firing Federal Reserve Governor Lisa Cook after a federal judge issued a restraining order on Tuesday. The ruling by Judge Jia Cobb of the U.S. District Court for the District of Columbia halts Trump’s efforts to remove Cook from the central bank’s board.
Cook, the first Black woman to serve as a Fed governor, sued Trump two weeks ago after he announced her dismissal in late August. Trump claimed she was implicated in mortgage fraud allegations raised by Federal Housing Finance Agency Director Bill Pulte. Cook strongly rejected the accusations, arguing the president lacked legal authority to remove her.
Her attorney, Abbe Lowell, stated the attempt threatened both the stability of the U.S. financial system and the rule of law. The court order also prevents Fed Chair Jerome Powell and the Board of Governors from executing any directive to oust Cook. Trump is expected to appeal the decision, with the case likely heading to the Supreme Court.
The ruling temporarily eases market fears over the Federal Reserve’s independence. Trump has repeatedly attacked the central bank, pressuring Powell to cut interest rates. His attempt to replace Cook, a Biden-era appointee whose term extends beyond Trump’s presidency, was seen as a move to strengthen his influence over monetary policy.
The Fed is widely expected to cut rates in September, though Powell has voiced caution, citing inflationary risks tied to Trump’s trade tariffs. The legal battle over Cook’s position adds another layer of uncertainty to U.S. economic policy.
This case underscores the high-stakes clash between the White House and the Federal Reserve, with potential long-term implications for central bank independence and financial market stability.
