Federal judge weighs emergency bid to block firing of Fed governor Lisa Cook ahead of Sept. interest-rate meeting

A Washington federal judge heard more than two hours of argument Friday on whether to temporarily bar President Donald Trump from removing Federal Reserve Governor Lisa Cook, a dispute that could test long-standing limits on presidential control of the central bank.

A U.S. District Court judge in Washington, D.C., on Friday considered an emergency request by Federal Reserve Governor Lisa Cook for an injunction that would block her firing by President Donald Trump and keep her on the central bank’s seven-member Board of Governors while litigation proceeds. The hearing, which lasted more than two hours, gave no clear sign of when the court would rule on the temporary restraining order sought by Cook’s attorneys.

Cook, a Biden appointee confirmed to the Board of Governors in 2022, sued after Trump removed her from office this week, citing allegations that she committed mortgage fraud when she purchased a home and a condominium in 2021. Her attorneys argue the White House failed to give her sufficient time to respond and did not demonstrate that her alleged conduct met the statutory "for cause" standard for removal of a Fed governor. The Justice Department’s attorneys, representing the administration, defended the dismissal.

Cook asked U.S. District Judge Jia M. Cobb to issue a temporary restraining order and preliminary injunction to restore her status on the Board while her lawsuit challenging the removal moves through the courts. At the hearing, Cook’s lead counsel, Abbe Lowell, argued the firing violated her client’s due-process rights by not providing adequate time to respond to the allegations and by failing to show that removal was for cause. A Justice Department lawyer countered, according to court observers, that the administration acted within its authority.

Judge Cobb gave no indication at the close of the hearing which way she would rule and set no timetable for a decision. During the proceeding she emphasized the importance of maintaining the Federal Reserve’s independence, remarks that underscored the legal and institutional significance of the case for both monetary policy and separation of powers.

The case arrives as the Federal Reserve’s Board of Governors and several Reserve Bank presidents prepare to meet in Washington on Sept. 16–17 to discuss U.S. monetary policy, including possible changes to short-term interest rates. That meeting — and investor expectations about whether the Fed will raise, cut or hold rates — is watched closely by markets, and efforts to influence who sits on the policy-making board have the potential to raise questions about the central bank’s ability to act independently.

No U.S. president has ever removed a sitting Federal Reserve governor in the central bank’s more than century-long history. The statute that governs the Fed’s leadership limits presidential removal of a governor to instances of cause, and legal challenges over the scope and application of that standard can raise novel constitutional and administrative-law questions. Cook’s attorneys contend that the administration has not met the for-cause threshold.

Cook’s complaint seeks immediate judicial relief through an emergency injunction that would allow her to retain her seat on the Fed while the underlying lawsuit — which seeks to overturn the removal as unlawful — proceeds. Should district court proceedings not resolve the matter, legal analysts say the case could proceed through appeals and might ultimately reach the U.S. Supreme Court, given the constitutional and systemic questions at stake.

Economists and scholars who have publicly discussed the dispute emphasize the institutional norm of Fed independence. Many in the economics profession argue that insulating monetary policymakers from day-to-day political pressures allows the central bank to take economically difficult or politically unpopular steps, such as raising interest rates to counter inflation, without immediate political reprisals. The question of whether a president may remove a governor for reasons other than those statutorily permitted could alter the balance between political control and independent central banking.

The Justice Department’s representation of the White House in the case indicates the administration is prepared to defend its authority to remove an appointed officer in the interest of enforcing ethical or legal standards, a position that the government contends fits within existing removal powers. Cook’s lawyers have focused on procedural aspects of her removal and the statutory protections afforded to Fed governors.

Observers at the hearing noted the unusually high stakes for both legal doctrine and monetary policy. The Board of Governors is one of several key institutions responsible for setting the federal funds rate and signaling policy intentions; personnel changes at the board can affect market perceptions about the central bank’s future path. Nevertheless, Judge Cobb’s emphasis on institutional independence suggested the court may weigh carefully the long-established practice of guarding the Fed against political interference.

Cook’s firing and the subsequent legal fight come against a backdrop of ongoing debate over the proper role of presidents in influencing central-bank policymaking. Presidents have long sought to shape economic policy through nominations to the Fed’s board, but removal of a sitting governor is historically unprecedented. The procedural timetable for the case will determine whether the dispute is resolved before the Fed’s mid-September policy meeting or whether it will unfold alongside the board’s deliberations.

The court’s ruling on the temporary restraining order will determine if Cook can immediately resume her duties while the case moves forward. If the judge denies the request, Cook’s attorneys can seek further relief through appeals. If the court grants the injunction, the administration could appeal to the D.C. Circuit Court of Appeals, potentially accelerating a broader judicial review of the removal authority. Either path could extend the dispute into higher courts and prolong legal uncertainty around the Fed’s leadership.

The controversy has drawn attention from legal scholars, market participants and political observers who are tracking both the narrow legal issue of removal authority and the broader implications for the Federal Reserve’s capacity to conduct monetary policy free from short-term political pressures. For now, those watching monetary-policy markets will look to both the court and the Fed’s September meeting for signals about the institution’s direction and independence.

Sources

• https://nypost.com/2025/08/29/us-news/dc-federal-judge-to-weigh-order-blocking-fed-gov-lisa-cooks-firing-ahead-of-interest-rate-meeting/
• https://abcnews.go.com/Business/wireStory/fed-governor-cook-seek-court-order-blocking-firing-125087399