For the first time since the Federal Reserve was created in 1913, a sitting president tried to remove a Fed governor. And for the first time, a court had to decide whether that could actually happen.
Donald Trump’s bid to oust Federal Reserve Governor Lisa Cook hit a wall on Monday when the U.S. Court of Appeals for the D.C. Circuit refused to greenlight her removal. The decision means Cook remains in her seat just hours before the Fed meets to deliberate on interest rate cuts aimed at stabilizing a cooling labor market.
The ruling came after a lower court had already blocked the president’s move. Trump’s team argued that the White House holds broad authority to fire Fed governors. But the appellate judges weren’t convinced, noting that Cook had been given no meaningful chance to respond to allegations—mortgage fraud claims she flatly denies.
The panel split 2-1, with two Biden-appointed judges finding Cook’s constitutional due process claim highly likely to succeed. The lone dissenter, a Trump appointee, insisted the administration’s authority outweighed any temporary disruption.
The case reaches far beyond one individual. At its core lies a question the nation has never truly answered: how independent is the Federal Reserve from the political winds of the White House? Congress gave presidents power to remove Fed governors only “for cause,” but never spelled out what that means. No president has ever tested it—until now.
Cook, the first Black woman to serve as a Fed governor, argues Trump’s case is less about alleged misconduct and more about silencing a voice he sees as too cautious on interest rates. The White House insists otherwise, claiming it is acting to preserve the Fed’s credibility.
Meanwhile, the Senate confirmed Trump’s nominee Stephen Miran to another Fed board seat in a razor-thin 48-47 vote, ensuring his presence at this week’s rate-setting meeting alongside Cook.
The stakes are enormous. Trump has loudly demanded aggressive rate cuts. The Fed has resisted—until this week, when a modest cut is expected. The outcome of this legal fight could redefine the boundary between monetary policy and presidential power, with markets worldwide watching every move.
