President Trump can't remove Federal Reserve governor Lisa Cook while her lawsuit challenges his attempts to fire her, a federal judge ruled on Tuesday night.
Why it matters: The ruling temporarily settles the question over Cook's status ahead of a critical Fed policy meeting, though the Trump administration has already filed notice that it will appeal the decision.
Zoom in: The battle over whether Cook can continue to serve on the Fed's Board of Governors comes one week before the central bank's next policy meeting.
- Until now, it had been unclear whether the official would be able to vote on the interest rate decision. The Fed is expected to cut rates for the first time in a year.
Catch up quick: Cook sued the Trump administration on Aug. 28 and asked for a preliminary injunction that would allow her to continue in the role.
- Trump's firing of Cook left the Fed in an awkward position while the court took up the case.
- Before the suit was filed, a Fed spokesperson said that the central bank would "abide by any court decision."
Driving the news: "The Court finds that Cook has made a strong showing that her purported removal was done in violation of the Federal Reserve Act's 'for cause' provision," Judge Jia Cobb wrote in the decision in D.C.
What they're saying: "This ruling recognizes and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference," Abbe David Lowell, Cook's lawyer, said in a statement.
- "Allowing the President to unlawfully remove Governor Cook on unsubstantiated and vague allegations would endanger the stability of our financial system and undermine the rule of law."
The other side: "President Trump lawfully removed Lisa Cook for cause due to credible allegations of mortgage fraud from her highly sensitive position overseeing financial institutions on the Federal Reserve Board of Governors," said White House spokesperson Kush Desai.
- "This ruling will not be the last say on the matter, and the Trump Administration will continue to work to restore accountability and confidence in the Fed."
The big picture: Trump fired Cook last month, the first time a president has sought to remove a Fed governor.
- It raised legal questions about how much control a president can wield over the politically independent central bank.
- Trump fired Cook on the grounds of alleged mortgage fraud before taking up the Fed post, though no official charges have been filed against the Fed official.
Between the lines: The Federal Reserve Act says the president can only fire Fed officials "for cause," though the law does not specify what that entails.
- In the opinion, Cobb argues that a president cannot remove a Fed official for "conduct that occurred before they began in office."
Editor's note: This article has been updated with new details throughout.
