A federal court has blocked United States President Donald Trump from firing Federal Reserve governor Lisa Cook as the lawsuit challenging her removal continues.
This acts as a blow to the Trump administration's efforts to assert more power over the Federal Reserve in a bid to get lower interest rates.
U.S. District Court Judge Jia Cobb granted Cook the preliminary injunction barring her termination, saying that "Cook has made a strong showing that her purported removal was done in violation of the Federal Reserve Act’s ‘for cause’ provision”.
“The public interest in Federal Reserve independence weighs in favour of Cook’s reinstatement,” Cobb said.
″‘For cause’ thus does not contemplate removing an individual purely for conduct that occurred before they began in office.”
Cobb said this in reference to the allegations of mortgage fraud that one of Trump’s allies and the leader of the U.S. Federal Finance Agency, Bill Pulte, made against Cook. Pulte said Cook claimed two different properties as primary residences when obtaining mortgages in 2021.
Cook denies any wrongdoing. Multiple federal agencies were provided the details of her mortgages when she was appointed by former President Joe Biden in 2022 as the first black woman on the Board of Governors.
“The Government has long known about the alleged facial inconsistencies in Governor Cook’s financial documents,” the filing said.
