Judge Temporarily Blocks President Trump from Removing Fed Governor Lisa Cook

A federal judge on Tuesday temporarily barred President Donald Trump from removing Federal Reserve Governor Lisa Cook, finding the administration’s allegations of pre-office mortgage fraud likely insufficient legal grounds for her dismissal.

U.S. District Judge Jia Cobb in Washington, D.C., granted a preliminary injunction after evaluating the administration’s assertion that Cook engaged in mortgage fraud before assuming office. Cobb concluded that the most reasonable interpretation of the statute establishing the Federal Reserve allows removal of a governor only for misconduct committed while serving, and that the mortgage-related accusations concern actions that took place before Cook’s Senate confirmation in 2022.

Cook has denied wrongdoing. In court filings she said she “did not ever commit mortgage fraud” and contended that even if the allegations were true they would not authorize removal because they predate her confirmation. Cook sued the president and the Federal Reserve, arguing the mortgage claims are a pretext for removing her because of her monetary policy positions.

The ruling prevents the Federal Reserve from carrying out Cook’s removal while her lawsuit proceeds. The case is expected to progress through appeals and could reach the U.S. Supreme Court, with potential implications for the Fed’s institutional independence and its ability to set interest rates free from political pressure.

White House spokesman Kush Desai said Wednesday that the president had “lawfully removed” Cook for cause over the mortgage allegations and that the injunction “will not be the last say on the matter.” The Justice Department has opened a criminal mortgage-fraud probe and issued grand jury subpoenas in Georgia and Michigan, according to documents and a source cited by Reuters.

Judge Cobb observed the administration failed to point to any actions tied to Cook’s role on the Board demonstrating she was “harming the Board or the public interest by executing her duties unfaithfully or ineffectively.” The Federal Reserve declined to comment on the ruling.

Trump has publicly urged the Fed to cut interest rates and criticized Chair Jerome Powell’s policy approach. The central bank is expected to consider a rate cut at its Sept. 16–17 policy meeting.