Federal Court Prevents President Trump from Firing Fed Governor Cook
An US appeals court has determined that President Donald Trump may not remove Federal Reserve board member Lisa Cook from her position.
The split decision on Monday represents a setback to Trump, as it ensures Cook can stay in office for the key Fed gathering on Tuesday and Wednesday, where officials are anticipated to cut US borrowing costs.
Trump announced in August that he was dismissing Cook, claiming she had committed financial misconduct. Cook rejected the claims and stated that the president had no authority to remove her.
This case has significant implications for the Fed's ability to set monetary policy free from interference from elected officials.
Cook is a member of the governing body responsible for setting monetary policy in the US.
When Congress established the Fed in 1913, it included safeguards to maintain its autonomy from political pressure. No president has ever removed a Fed board member.
The statutes cited by Trump to justify his effort to fire Cook had never been tested in a judicial setting. The Trump team is expected to challenge Monday's ruling to the Supreme Court.
Under the legislation that established the Fed, its board members may only be removed by a president with justification, though the law does not clarify the term nor establish procedures for dismissal.
Cook, a Biden appointee and the pioneering black woman to hold office as a Fed board member, sued Trump in August, claiming she was being fired due to her monetary policy views.
The Fed has not cut interest rates so far this year as it aims to manage inflation, which have been fueled in part by the impact of Trump's tariffs on foreign products.
Trump has repeatedly demanded aggressive rate cuts and has criticized Fed Chair Jerome Powell over his management of interest rates.
A rate cut is expected this week, however, in an effort to boost a slow US job market.
On Monday, Trump repeated his demand for a large interest rate cut, writing on his Truth Social platform that Fed Chair Jerome Powell "must cut interest rates, now, and bigger than he had in mind."
