Daijiworld Media Network- Washington

Washington, Sep 10: In a significant legal development, a federal judge has temporarily blocked President Donald Trump from removing Federal Reserve Governor Lisa Cook, marking an early setback for the White House in a high-stakes legal battle over the central bank’s independence.

US District Judge Jia Cobb of Washington, D.C., issued a preliminary ruling on Tuesday, preventing Cook’s removal for now. The ruling does not address the core question of whether allegations that Cook committed mortgage fraud prior to taking office constitute sufficient cause for dismissal. Cook has consistently denied any wrongdoing.

Trump had moved to fire Cook in late August, but the Federal Reserve maintained her position, emphasizing that she remains in office. Legal experts say the case could ultimately reach the US Supreme Court, raising questions about the Fed’s autonomy in setting interest rates without political interference—a cornerstone of central banking designed to control inflation.
The White House has not commented on the ruling, and Trump declined to respond to reporters’ questions regarding the decision.

Judge Cobb, in her ruling, highlighted that the “for cause” provision in the law establishing the Fed pertains to a governor’s behavior while in office. She wrote:

"‘For cause’ does not contemplate removing an individual purely for conduct that occurred before they began in office."

The Trump administration, along with FHFA Director William Pulte, has alleged that Cook misrepresented information on mortgage applications for three separate properties, potentially enabling lower interest rates and tax credits. The US Justice Department has also launched a criminal mortgage fraud investigation, issuing grand jury subpoenas in Georgia and Michigan.

Cook filed a lawsuit last week against Trump and the Fed, asserting that the allegations are pretextual, aimed at removing her over disagreements regarding monetary policy. She is the first Black woman to serve as a Federal Reserve governor and has denied all fraud claims in court filings, stating she “did not ever commit mortgage fraud.”

The ruling underscores the tension between the White House and the Federal Reserve, as Trump continues to press for immediate and aggressive interest rate cuts, despite the Fed’s independent policy framework.