U.S. appeals court blocks Trump’s attempt to remove Fed Governor Cook

A U.S. appeals court on Monday rejected President Donald Trump’s bid to remove Federal Reserve Governor Lisa Cook, marking the first time in the central bank’s 112-year history that a sitting president has sought to oust a member of its board.

The ruling from the U.S. Court of Appeals for the District of Columbia Circuit dealt a setback to Trump’s efforts to reshape the Fed ahead of a crucial policy meeting this week.

The decision leaves Cook in place and clears the way for her to participate in deliberations on Tuesday and Wednesday, when the central bank is expected to lower interest rates in response to a slowing labor market.

Cook, a former Michigan State University economics professor and the first Black woman to serve as a Fed governor, has vowed to fight what she called an “unconstitutional and unprecedented” dismissal attempt.

She sued the administration last month after Trump signaled he would replace her with a more conservative voice aligned with his push for looser monetary policy and faster rate cuts.

Legal experts said the appeals court’s ruling reinforced the Fed’s longstanding independence from direct White House control. Since its founding in 1913, the central bank’s governors, who serve staggered 14-year terms, have been shielded from removal except for cause, such as misconduct or incapacity.

“The court has reaffirmed that presidents cannot fire Fed officials simply because they disagree with policy decisions,” said Sarah Binder, a political science professor at George Washington University. “The independence of the Federal Reserve has always been one of the cornerstones of U.S. economic stability.”

The Trump administration now faces a narrow window to escalate the case to the Supreme Court before the Fed’s meeting begins. White House lawyers declined to comment on whether they would pursue an emergency appeal.

The dispute comes at a pivotal moment for the U.S. economy. Employers have slowed hiring in recent months, wage growth has eased, and consumer confidence has dipped. Fed officials are widely expected to approve a quarter-point rate cut this week, aiming to cushion the economy against further weakening.

Analysts say Cook’s vote could prove decisive if the board is closely divided. She has been a strong advocate for balancing inflation concerns with the Fed’s dual mandate to maximize employment, and she has argued in favor of more cautious but targeted easing measures.

While Trump has repeatedly criticized the Fed since returning to office, accusing it of moving too slowly to support growth, Monday’s ruling highlights the limits of presidential power over the central bank.

“This is about more than one governor,” said Peter Conti-Brown, a Federal Reserve historian at the University of Pennsylvania.

“It’s about whether the Fed remains an independent institution or becomes an arm of the White House.”

With the court battle likely to intensify, attention now shifts to the Supreme Court, which could be asked to weigh in on the separation of powers between the presidency and the nation’s most influential economic institution.