A U.S. appeals court has rejected an attempt by President Donald Trump to remove Federal Reserve Governor Lisa Cook ahead of this week’s critical monetary policy meeting.
The D.C. Circuit Court of Appeals ruled 2-1 on Monday, denying the Justice Department’s request to pause a lower court order that temporarily blocks Trump from ousting Cook. The ruling ensures Cook will remain on the Fed’s board as officials prepare to vote on a possible interest rate cut aimed at supporting a cooling labor market.
The decision follows U.S. District Judge Jia Cobb’s September 9 ruling that Trump’s claims of alleged mortgage fraud against Cook which she denies, are unlikely to meet the legal threshold required for removal under the Federal Reserve Act.
Circuit Judges Bradley Garcia and J. Michelle Childs, both appointed by former President Joe Biden, sided with Cook, writing that she had been denied due process under the Fifth Amendment. Trump-appointed Judge Gregory Katsas dissented.
“Before this court, the government does not dispute that it provided Cook no meaningful notice or opportunity to respond to the allegations against her,” Garcia wrote in the opinion.
The Federal Reserve has not made legal arguments in the case but has requested a swift resolution. The institution stated it would comply with any final ruling by the courts.
The Biden-appointed Cook’s position on the Fed remains secure for now, as Trump faces a narrow window to appeal to the Supreme Court before the Fed’s upcoming policy meeting.
