A federal judge on Tuesday granted a temporary restraining order blocking President Donald Trump’s firing of Federal Reserve governor Lisa Cook for now.
The ruling means Cook will remain on the board of the central bank until her case is heard at length. She is allowed to continue carrying out her work during that time.
In granting the order, U.S. District Judge Jia Cobb said that "the Court will enter an injunction directing [Fed Chair Jerome] Powell and the Board of Governors to allow Cook to continue to operate as a member of the Board for the pendency of this litigation."
"The public interest in Federal Reserve independence weighs in favor of Cook’s reinstatement," Cobb wrote. "That independence is critical in helping the nation’s 'banking system to promote stability.'"
Lawyers for Cook argued in federal court in Washington that Trump’s attempt to fire her for “mortgage fraud” was illegal and lacked “cause,” which is the only reason a Fed governor can be removed. “Cause” is commonly understood to be some kind of wrongdoing.
If Cobb's ruling remains in effect, Cook would be able to participate in the Fed's highly anticipated two-day meeting that starts Sept. 16, when the central bank is likely to lower interest rates.
However, Trump's Justice Department on Wednesday afternoon appealed Cobb's ruling. It's unclear how quickly that appeal would be heard.
Trump moved to fire Cook in late August, citing allegations of mortgage fraud brought by one of his political appointees. Cook has not been charged with any crime.
"Governor Cook did not ever commit mortgage fraud," Cook's lawyers wrote in a filing last week.
A White House spokesperson argued in a statement Tuesday night that Trump "lawfully removed Lisa Cook for cause due to credible allegations of mortgage fraud from her highly sensitive position overseeing financial institutions on the Federal Reserve Board of Governors."
"This ruling will not be the last say on the matter, and the Trump Administration will continue to work to restore accountability and confidence in the Fed," spokesperson Kush Desai said.
The Federal Reserve declined to comment on the order. It previously said in a statement that it would "abide by any court decision."
Abbe Lowell, who is representing Cook, said in a statement: “Today’s ruling recognizes and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference. Allowing the President to unlawfully remove Governor Cook on unsubstantiated and vague allegations would endanger the stability of our financial system and undermine the rule of law. Governor Cook will continue to carry out her sworn duties as a Senate-confirmed Board Governor."
Cook is the first Black woman to serve as a governor on the board of the Fed in its more than 110-year history. Before she joined the Fed, she was a professor of economics and international relations at Michigan State University.
