Federal Reserve Governor Lisa Cook has won a temporary reprieve in a high-profile legal and political battle, as a federal court ruled on September 9, 2025, that she can remain in her position while challenging President Donald Trump’s attempt to fire her. The ruling, issued by U.S. District Judge Jia Cobb, blocks Cook’s removal for now and highlights the intensifying struggle over the independence of America’s central bank.
The dispute centers on Trump’s August 25 announcement that he was firing Cook over allegations of mortgage fraud—a move that, according to AP News, is unprecedented in the 112-year history of the Federal Reserve. Trump’s team, led by William Pulte, head of the Federal Housing Finance Agency, accused Cook of labeling two properties purchased in 2021 as “primary residences,” which could have resulted in more favorable mortgage terms. These events occurred before Cook joined the Fed.
Judge Cobb, who was appointed by former President Joe Biden, found these allegations lacking. In her ruling, she wrote, “The removal of a Federal Reserve Governor extends only to concerns about the Board member’s ability to effectively and faithfully execute their statutory duties, in light of events that have occurred while they are in office.” She further stated, “President Trump has not stated a legally permissible cause for Cook’s removal.” This interpretation is crucial, as federal law stipulates that governors can only be removed “for cause”—typically meaning neglect, malfeasance, or serious misconduct while in office, not for alleged actions before their tenure or for policy disagreements.
Cook’s legal team, led by Abbe Lowell, welcomed the decision. In a written statement reported by AP News, Lowell said, “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. Governor Cook will continue to carry out her sworn duties as a Senate-confirmed Board Governor.” The White House declined to comment immediately after the ruling.
The court also ordered Federal Reserve Chair Jerome Powell and the rest of the Board of Governors to allow Cook to participate fully in the Board’s activities during the ongoing litigation. This includes the upcoming September 16-17 meeting, where the Fed is expected to reduce its key short-term interest rate by a quarter-point to between 4% and 4.25%.
Behind the legal drama lies a broader political struggle. As discussed on The Daily Blast podcast from The New Republic, Trump’s move to oust Cook is widely viewed as part of a larger effort to assert control over the Fed, a body Congress has historically sought to shield from day-to-day politics. Greg Sargent, the podcast’s host, described the mortgage fraud allegations as a “big scam,” noting that news organizations have “blown big holes in that effort.” Matt Ford, a legal affairs writer for The New Republic, called the selective pursuit of Cook “corrupt” and “vindictive,” pointing out that similar mortgage arrangements are not uncommon—even among Trump’s own appointees.
Indeed, a ProPublica investigation found that Labor Secretary Lori Chavez-DeRemer, Transportation Secretary Sean Duffy, and EPA Administrator Lee Zeldin—three Trump officials—also have multiple primary residence mortgages. Reuters reported that William Pulte’s own family members have engaged in similar practices. Ford remarked on the podcast, “It’s essentially seeing a bunch of people cross the street and only picking out a few people for jaywalking.” He argued that if this practice is as widespread as it appears, the solution should be regulatory clarity, not selective prosecution for political gain.
Public sentiment appears to be firmly against Trump’s attempts to meddle with the central bank. A recent CBS poll cited on The Daily Blast found that 68% of Americans want the Federal Reserve to make decisions independently from the president, and 70% oppose the idea of Trump replacing Fed members who disagree with him. Ford interpreted this as a sign that Americans “value [the Fed’s] expertise” and “its independence,” especially given its immense influence over the economy and financial markets.
The controversy has revived comparisons to previous abuses of executive power. The podcast drew parallels to the Watergate scandal, when President Nixon’s administration was found to have used government agencies to target political enemies. “Unless you have some rational predicate for an investigation, it’s inappropriate,” Ford said, likening the rummaging through Cook’s mortgage records to Nixon’s misuse of IRS files.
At the heart of the legal battle is the meaning of “for cause” removal. As Ford explained, “for cause” has historically been interpreted to mean serious misconduct or malfeasance while in office, not vague or pretextual allegations. Judge Cobb’s ruling reinforced this principle, emphasizing the need for due process—notice, an opportunity to respond, and a substantive review of the charges—before removal can occur. Cook’s lawsuit asserts that she was denied these basic procedural protections.
This case could become a watershed moment for the Federal Reserve’s independence. No president has ever tried to fire a Fed governor before. If Trump succeeds in removing Cook, he could gain a 4-3 majority on the Board of Governors, potentially reshaping monetary policy to favor lower interest rates. Trump has repeatedly criticized Fed Chair Jerome Powell and other board members for not cutting rates more aggressively, stating that he wants the rate as low as 1.3%—a level few economists endorse. The current rate stands at 4.3%, following a full percentage point cut late last year.
Cook, notably, is the first Black woman to serve as a Federal Reserve governor. Her academic credentials include degrees from Oxford University and Spelman College, and she has taught at Michigan State University and Harvard University’s Kennedy School of Government.
Meanwhile, Trump has nominated Stephen Miran, a key White House economic adviser, to replace Adriana Kugler, who stepped down as a Fed governor on August 1. The Senate Banking Committee is set to vote on Miran’s nomination this week, a move that could further shift the balance of the Board.
As the legal fight continues, the outcome will have far-reaching implications—not just for Lisa Cook, but for the future of the Federal Reserve and its ability to operate without political interference. The court’s ruling has, for now, upheld the principle that America’s central bank must answer to the law and the public interest, not to the whims of any one president.
