Trump suffers major legal setback in effort to fire Fed Governor Lisa Cook

Washington DC - A US federal judge on Tuesday temporarily blocked President Donald Trump's move to fire Federal Reserve Governor Lisa Cook, who is challenging her shock dismissal.

President Donald Trump's move to fire Fed Governor Lisa Cook has been temporarily blocked by a federal judge.
President Donald Trump's move to fire Fed Governor Lisa Cook has been temporarily blocked by a federal judge.  © Collage: REUTERS

Judge Jia Cobb granted Cook's request for an order to remain on the bank's board while her lawsuit plays out – just a week before a highly anticipated Fed rate meeting.

In her opinion, judge Cobb found that Cook was "substantially likely" to succeed in certain claims, including her argument that Trump violated the Federal Reserve Act as her removal did not comply with the statute's "for cause" requirement.

"The public interest in Federal Reserve independence weighs in favor of Cook's reinstatement," Cobb added.

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Trump did not respond to a question about the ruling asked by a reporter Tuesday night, as he exited a Washington DC restaurant where he was confronted by protesters.

Cook's lawyer Abbe David Lowell praised the ruling, saying it "recognizes and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference."

"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.

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The Supreme Court suggested in a recent ruling that Fed officials can only be removed "for cause," which could be interpreted to mean malfeasance or dereliction of duty.

In Tuesday's opinion, Cobb also noted that Cook's case was the first such removal "in the Federal Reserve's 111-year history," and questioned the nature of the Trump administration's accusations of mortgage fraud against her.

"'For cause' thus does not contemplate removing an individual purely for conduct that occurred before they began in office," Cobb wrote.

Trump's move to fire Cook also marked a dramatic escalation in his effort to exert control over the Fed, which he has repeatedly called on to lower interest rates immediately, going so far as to mock Chairman Jerome Powell as "Mr. Too Late."

Cover photo: Collage: REUTERS

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