A panel of federal judges blocked President Donald Trump from removing Lisa Cook from the Federal Reserve's board, hours before she and other top Fed officials are set to begin a meeting about whether to lower interest rates.
Two of three judges on the appeals court panel said the Trump administration had “not satisfied the stringent requirements for a stay pending appeal.”
A federal judge in Washington blocked Cook’s removal on Sept. 9, but the administration quickly appealed the ruling and asked the court to rule before the Fed’s next meeting on interest rates. That meeting begins Tuesday and concludes Wednesday.
Trump is likely to appeal Monday's ruling to the Supreme Court.
Trump moved to fire Cook in late August, citing allegations of mortgage fraud brought by one of his political appointees, Federal Housing Finance Agency Director Bill Pulte. Cook has not been charged with any crime and has denied the allegations.
“Governor Cook did not ever commit mortgage fraud,” Cook’s lawyers wrote in a recent legal filing. NBC News has also reviewed documentation about the property in question, which shows that she designated the second property as a “vacation home” or “2nd home” and not as a primary residence, as Pulte has alleged.
In their ruling, the appeals court judges said Cook “may not be removed prior to being provided ‘some kind’ of meaningful notice and opportunity to respond.”
The judges added that “Cook’s role at the Federal Reserve differs in relevant ways” from the roles of officials at other agencies.
The Supreme Court recently sought to distinguish the Fed from other attempts by Trump to fire top officials at federal agencies. The high court noted that the Fed is a “uniquely structured, quasi-private entity” that has its own distinct historical tradition.
Under the Federal Reserve Act, the only reason Federal Reserve governors can be removed from their positions is “for cause,” or some type of wrongdoing.
The White House has repeatedly maintained that Trump "lawfully removed Lisa Cook for cause."
The allegations of mortgage fraud from the administration closely resemble similar allegations made against top Democrats.
Trump is the first president in history to try to fire a top Fed official. Cook's lawyers have said that if he succeeds, it could lead to instability at the world's most influential central bank.
“An independent central bank ... acts predictably and transparently, which stabilizes markets and the wider economy," her lawyers wrote in an Aug. 28 court filing. "In the few days following President Trump’s unprecedented action, media, economists, and academics from across the political spectrum have sounded the alarm that his actions threaten the historic independence of the Federal Reserve."
Many economists have raised concerns that firing Cook could lead to widespread financial instability.
“If the president were successful" in removing Cook, "the outcome would be momentous,” JPMorgan’s chief U.S. economist wrote shortly after Trump said he was firing her.
