A judge on Tuesday night blocked President Donald Trump from firing Federal Reserve Governor Lisa Cook as a lawsuit challenging her removal continues.
“The public interest in Federal Reserve independence weighs in favor of Cook’s reinstatement,” U.S. District Court Judge Jia Cobb wrote in granting Cook a preliminary injunction barring her termination.
Cobb said that “Cook has made a strong showing that her purported removal was done in violation of the Federal Reserve Act’s ‘for cause’ provision.”
Cobb wrote that “the best reading” of that provision is that legal cause for removing a Fed governor is limited to actions related to their “behavior in office.”
″‘For cause’ thus does not contemplate removing an individual purely for conduct that occurred before they began in office,” Cobb wrote.
The judge was referring to allegations of mortgage fraud by Cook that Trump cited for firing her.
Cook, who denies any wrongdoing, is the first Black female Fed governor.
The Supreme Court is expected to have the final say in the case, which involves the first-ever effort by a president to fire a Fed governor for purported cause.
Cobb’s decision means that Cook will participate in the Fed’s next meeting, which starts Sep. 16. The Fed is expected to cut interest rates at that two-day meeting.
Trump said on Aug. 25 that he was removing Cook because of suggestions by Federal Housing Finance Agency Director Bill Pulte that she committed mortgage fraud in signing documents for two properties she owns.
Cook signed those documents before she joined the Fed.
Trump’s attempt to remove Cook came after months of him unsuccessfully pressuring the Fed and its chairman, Jerome Powell, to cut interest rates. Trump seriously considered firing Powell over the summer.
