Court Upholds Fed Governor's Position Amid Trump's Controversial Dismissal Attempt

Fri Oct 17 2025 01:48:54 GMT+0300 (Eastern European Summer Time)

A federal appeals court has ruled against President Trump, allowing Federal Reserve governor Lisa Cook to remain in her role. The ruling signifies a significant moment for the Fed's independence and the political landscape surrounding interest rate policies.

In a critical ruling, a federal appeals court has denied President Trump's attempt to remove Lisa Cook from her position as governor of the Federal Reserve. Cook, who has faced allegations of misconduct, successfully argued that Trump lacked the authority to dismiss her. This decision not only impacts Cook's future but also underscores the importance of preserving the Federal Reserve's autonomy in monetary policy setting—a principle established since the institution's founding. The ruling is expected to be appealed to the Supreme Court, signaling ongoing tensions between the executive branch and the Fed.

A federal appeals court has ruled that US President Donald Trump cannot oust Federal Reserve governor Lisa Cook from her role. The 2-1 decision marks a significant setback for Trump, allowing Cook to participate in the Fed's policy meeting scheduled for Tuesday and Wednesday, during which a cut to US interest rates is anticipated.

Earlier in August, Trump publicized his intention to fire Cook, accusing her of mortgage fraud—an allegation she firmly denies. Cook, in her defense, argued that Trump has no legitimate authority to terminate her position.

This ruling carries essential implications for the autonomy of the Federal Reserve, which has historically operated free from direct political interference in rate-setting processes. The independence of the Fed was notably established during its founding in 1913, and no president has previously attempted to remove a Fed governor.

Cook, a Biden appointee and notable as the first black woman to serve on the Fed board, filed suit against Trump, alleging that his decision to dismiss her was politically motivated due to her monetary policy positions.

The law governing the Fed stipulates that governors can only be removed for cause, a term that remains undefined within legal context. Trump's administration plans to appeal this ruling to the Supreme Court, which will further delve into the legal frameworks surrounding political influence over the Federal Reserve.

As the Fed approaches significant policy decisions, Cook's continued presence could impact discussions around necessary rate cuts aimed at stimulating a sluggish US labor market. In recent days, Trump has intensified his calls for aggressive rate cuts, asserting that such actions are crucial for the economy's recovery.