The Trump administration on Thursday asked a federal appeals court to overturn a ruling that blocked President Trump from removing Federal Reserve Governor Lisa Cook, ahead of a critical meeting next week where Fed officials are set to decide on interest rate cuts.
President Trump attempted to dismiss Cook from the Federal Reserve’s Board of Governors last month, accusing her of misrepresenting her principal residence on mortgage applications for two different homes. On Tuesday, U.S. District Judge Jia Cobb halted the move, ruling that the president “has not stated a legally permissible cause for Cook’s removal.” Federal law grants board members 14-year terms and limits removals to instances of cause.
The Justice Department, in its Thursday filing with the U.S. Court of Appeals for the D.C. Circuit, urged the court to suspend Cobb’s order while the appeal proceeds. The administration argued that presidents have broad discretion in determining whether cause exists to remove officials, and that judicial review should be highly limited.
“Here, the evidence: which Cook has yet to offer contrary explanation for, was that she applied for two loans for her personal benefit, and was able to obtain favorable interest rates by misrepresenting where she lived,” the government wrote. “Regardless of whether that misconduct occurred before or during office, it indisputably calls into question Cook’s trustworthiness and whether she can be a responsible steward of the interest rates and economy for the whole Nation.”
The allegations against Cook were raised in a letter from Federal Housing Finance Agency Director Bill Pulte, a Trump appointee, who cited mortgage records for properties Cook purchased in Georgia and Michigan in 2021. Her attorney, Abbe Lowell, dismissed the claims as “unsubstantiated and vague.”
The government asked the appeals court to rule by Monday, ahead of the Federal Open Market Committee’s two-day meeting beginning Tuesday.
The Federal Open Market Committee made up of Cook, Fed Chair Jerome Powell, and 10 other central bank officials, determines the Fed’s interest rate policy, shaping inflation, borrowing costs, and overall economic growth. The committee has so far held rates steady this year, but markets broadly expect a cut next week. While rate cuts could stimulate growth, they also risk fueling inflation.
President Trump has repeatedly criticized the Fed’s stance, branding Powell “Mr. Too Late” and urging the committee to take action. Powell’s term concludes in May.
Trump’s move to dismiss Cook, a Biden appointee whose term runs through 2038, came in late August. Although unrelated to his ongoing dispute with the Fed over rates, her removal would allow Trump to appoint a replacement, increasing his influence over the seven-member board.
