In a dramatic turn just hours before a pivotal Federal Reserve meeting, a federal appeals court has blocked President Donald Trump’s attempt to remove Governor Lisa Cook from the central bank’s Board of Governors. The decision, issued on Monday, September 15, 2025, by the U.S. Court of Appeals for the District of Columbia Circuit, marks an extraordinary moment in the ongoing tug-of-war over the Fed’s independence and the future of U.S. economic policy.
The three-judge panel delivered a 2-1 ruling, with Judges Bradley Garcia and Michelle Childs—both appointed by President Joe Biden—finding that Cook had been denied due process when Trump moved to oust her over allegations of mortgage fraud. As reported by CNN, Garcia and Childs wrote, “In this court, the government does not dispute that it failed to provide Cook even minimal process—that is, notice of the allegation against her and a meaningful opportunity to respond—before she was purportedly removed.” Judge Gregory Katsas, a Trump appointee, dissented, insisting that “President Trump removed Cook for cause.”
The timing of the ruling could hardly be more significant. The Federal Reserve’s two-day monetary policy meeting began on September 16, with the central bank widely expected to lower interest rates for the first time this year. The decision to keep Cook in her seat ensures her participation in a vote that will shape everything from mortgage rates to global financial stability.
Trump’s campaign to oust Cook, the first Black woman ever to serve on the Fed’s Board, began in late August. He cited allegations of mortgage fraud brought by Bill Pulte, the Trump-appointed director of the Federal Housing Finance Agency. According to NBC News, Cook has not been charged with any crime and has strenuously denied the accusations. Her attorneys, as quoted in legal filings, stated, “Governor Cook did not ever commit mortgage fraud.”
Newly surfaced documents reviewed by Democracy Docket and NBC News further undermine the allegations. Records show Cook listed her Atlanta condo as a “vacation home” and never claimed a primary residence tax exemption in Georgia. A Michigan assessor found no evidence of tax violations on her Ann Arbor home. “She did not ever commit mortgage fraud,” her attorneys reiterated, flatly rejecting the charges.
Cook’s legal team argued that the unproven allegations, which relate to conduct before she joined the Fed, do not meet the “for cause” standard required by the Federal Reserve Act. The law stipulates that presidents can only remove Fed governors “for cause,” a safeguard designed to protect the central bank’s independence from political interference. “President Trump does not have the power to unilaterally redefine ‘cause’—completely unmoored to caselaw, history, and tradition—and conclude, without evidence, that he has found it,” Cook’s attorneys wrote, as highlighted by CNN.
The case has become a flashpoint in the broader debate over the Fed’s autonomy. For more than a century, the central bank has functioned as an independent institution, focused on economic data rather than the political winds. Trump’s attempt to fire Cook—and his earlier threats against Fed Chair Jerome Powell—have alarmed economists and market watchers alike. As Cook’s lawyers warned in an August 28 court filing, “An independent central bank ... acts predictably and transparently, which stabilizes markets and the wider economy.”
Indeed, economists across the political spectrum have sounded the alarm. JPMorgan’s chief U.S. economist told NBC News that if Trump succeeded in removing Cook, “the outcome would be momentous.” The unprecedented nature of the move—no president has ever fired a sitting Fed governor in the institution’s 111-year history—has only heightened concerns. “President Trump’s attempted removal of Governor Lisa Cook, if allowed, would mark an immediate end to that history,” her attorneys warned in a Saturday court filing.
The court’s decision also carries immediate political implications. Trump’s push to seat more of his allies on the Fed’s board took a step forward on the same day as the ruling, when the Senate narrowly confirmed Stephen Miran, a Trump economic adviser, to a short-term vacancy on the Board. According to Democracy Docket, Miran will remain formally tied to the Trump administration, taking only unpaid leave from his White House post while serving at the Fed—a move that critics say further erodes the central bank’s tradition of independence.
Cook’s continued presence on the Board is not just a legal technicality. The Fed’s seven-member board plays a crucial role in setting interest rates and overseeing the stability of the U.S. banking system. With Miran’s confirmation, Trump’s nominees now hold a significant bloc, but Cook’s seat prevents them from holding a majority—at least for now.
As the legal battle rages on, the case is expected to proceed to a full appeal. Trump is likely to take the fight to the Supreme Court, as reported by NBC News. The Supreme Court has recently distinguished the Fed as a “uniquely structured, quasi-private entity” with its own historical tradition, limiting the president’s removal powers compared to other federal agencies.
Meanwhile, the White House maintains that Trump “lawfully removed Lisa Cook for cause,” and continues to question her trustworthiness in managing the U.S. money supply. The administration called her claims to stay on the board “meritless,” according to CNN.
Allegations similar to those leveled at Cook have also been made by Pulte against other Democrats, including Senator Adam Schiff and New York Attorney General Letitia James, both of whom, like Cook, deny any wrongdoing. Critics argue that such tactics are part of a broader effort to reshape the Fed’s leadership and policy direction.
For now, the court’s ruling means Cook will remain on the Board of Governors as litigation continues. The decision, as articulated by Judge Garcia, is rooted in the principle that “the plain purpose of providing for-cause protection was to assure members of the Board of Governors—and national and global markets—that they do not serve at will and thus enjoy a measure of policy independence from the President.”
As the Federal Reserve moves forward with its policy meeting, all eyes are on the central bank—not just for its decision on interest rates, but for what this legal saga means for the future of its independence. The stakes, both for the institution and the broader economy, could hardly be higher.
With the case heading for further appeals and the Fed’s next moves under intense scrutiny, the battle over Lisa Cook’s seat has become a symbol of the broader struggle over the boundaries between politics and economic stewardship in the United States.
