The clash between the White House and the Federal Reserve intensified Thursday as the Trump administration asked an appeals court to let President Trump remove Federal Reserve Governor Lisa Cook—despite a judge’s ruling that temporarily shielded her from dismissal.
Cook’s future on the central bank’s board has become a lightning rod, with her attorneys warning that forcing her out just days before a critical Fed meeting could rattle financial markets worldwide.
The administration insists the president should not be restrained. Trump has accused Cook of mortgage fraud tied to property deals prior to her 2022 confirmation—charges she flatly denies. Her lawyers counter that the claims are a thin cover for Trump’s anger at her approach to monetary policy.
Judge Jia Cobb ruled earlier this week that Cook should stay put for now, emphasizing the public’s stake in keeping the central bank free from political pressure. The law governing the Fed says governors may only be removed “for cause,” but offers no clear definition. No president has ever tested that language in court—until now.
The Justice Department argues that her removal would reinforce the Fed’s credibility, not weaken it. Cook’s attorneys disagree, warning that political meddling could destabilize both domestic and global markets.
The stakes are immense: the Fed is set to meet September 16–17, where a rate cut is widely expected. Trump has been loudly demanding steep, immediate reductions, often berating Fed Chair Jerome Powell in public.
The battle over Cook’s position is expected to climb all the way to the Supreme Court, setting the stage for a showdown that could redefine the balance of power between presidents and the nation’s most influential financial institution.
For now, Lisa Cook remains on the job—but the pressure cooker is heating fast, with markets and policymakers bracing for the next move.
