Federal Reserve Governor Lisa Cook is urging a U.S. appeals court to block President Donald Trump’s effort to oust her from the central bank just days before a crucial vote on interest rates.
In a Saturday filing, Cook’s attorneys asked the court to reject an emergency request from the Trump administration that would allow her removal. They argued that the president lacks sufficient grounds to dismiss a sitting Fed governor and warned of severe consequences for U.S. financial stability if such actions were permitted.
“A stay by this court would therefore be the first signal from the courts that our system of government is no longer able to guarantee the independence of the Federal Reserve,” the filing stated. “Nothing would then stop the president from firing other members of the board on similarly flimsy pretexts. The era of Fed independence would be over. The risks to the nation’s economy could be dire.”
The administration has until Sunday afternoon to respond. At stake is whether Trump can reshape the central bank’s leadership before policymakers meet Tuesday and Wednesday to decide whether to cut interest rates. Meanwhile, Senate Republicans are pressing ahead with a confirmation vote for Stephen Miran, Trump’s nominee for an open seat on the board, which could take place as soon as Monday.
The clash stems from accusations by Trump that Cook engaged in mortgage fraud in 2021, before joining the Fed. He claims she improperly listed two properties as “primary residences” to secure favorable loan terms. Cook has denied wrongdoing and filed suit against the administration to stop her removal.
Earlier this week, U.S. District Judge Jia Cobb ruled in Cook’s favor, saying governors can only be removed “for cause,” defined as misconduct while in office. Since the alleged actions predated her 2022 appointment, Cobb said the standard was not met. The administration quickly appealed, arguing the allegations undermine Cook’s integrity and ability to oversee the economy.
If the appeals court sides with Trump, Cook would be stripped of her role and miss the upcoming policy meeting. A ruling in her favor could still face a challenge at the Supreme Court.
The dispute comes as Trump escalates pressure on the Fed to lower rates, which have remained unchanged since late 2024 amid concerns his trade policies could stoke inflation. Fed Chair Jerome Powell recently signaled weakening job growth has increased the likelihood of a cut. Most economists expect the central bank will trim its benchmark rate by a quarter-point to about 4.1%.
Rate reductions typically ease borrowing costs for mortgages, auto loans and business lending. Markets have already begun adjusting in anticipation of a decision next week.
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