An appeals court in the United States has ruled in favor of Lisa Cook, allowing her to retain her seat on the Federal Reserve amidst efforts from the Trump administration to remove her. This decision marks a significant pushback against President Trump’s claims of wrongdoing against Cook, which have not yet been substantiated.
In a 2-1 ruling issued by the US Court of Appeals for the District of Columbia, the judges concluded that the Trump administration failed to meet the rigorous standards needed to suspend a lower court’s ruling that Cook should remain in her position while the legality of her removal is considered. This ruling occurred just before the Federal Reserve’s rate-setting committee was set to begin crucial discussions regarding potential interest rate changes.
Circuit Judge Bradley Garcia, who authored the majority opinion, found that Cook’s assertion of being denied due process had a “strong likelihood of success.” He pointed out that the Trump administration did not contest the fact that Cook had not received a proper opportunity to respond to the allegations made against her. Garcia highlighted that the government’s argument, which suggested that Cook failed to demonstrate how a hearing would have benefitted her, was insufficient to overlook her claim for due process rights.
President Trump initially moved to dismiss Cook from the Federal Reserve board, citing unproven claims that she had provided false information on a mortgage application. Cook has contested this order, arguing that it was illegal under federal law, which requires the president to show “cause”—commonly interpreted as malfeasance—before terminating a Fed governor’s position. Remarkably, no president has removed a Fed governor in the institution’s 111-year history.
In a related development, the Senate confirmed Stephen Miran, chair of Trump’s Council of Economic Advisers, to the Fed’s board of governors. This confirmation garnered attention due to concerns raised by Democrats regarding Miran’s independence, particularly since he chose to take a leave of absence from his White House role rather than resign outright.
