A federal judge late Tuesday temporarily blocked President Donald Trump's effort to remove Federal Reserve Governor Lisa Cook, saying the attempt likely violated constitutional protections and raised urgent questions about the central bank's independence.
Judge Says Trump's Removal Attempt Violated The Federal Reserve Act
U.S. District Judge Jia Cobb granted Cook's request to stop the firing, ruling that Trump's stated justification for an investigation into possible mortgage fraud fell outside the legal grounds for removal, as reported by CNN.
Cobb, an appointee of former President Joe Biden, said Cook showed a "strong showing" that her dismissal violated both the Federal Reserve Act and the Fifth Amendment.
"President Trump's actions and Cook's resulting legal challenge raise many serious questions of first impression that the Court believes will benefit from further briefing on a non-emergency timeline," Cobb wrote.
She emphasized that removal "for cause" applies only to a governor's conduct while in office, not to unrelated matters from the past.
Court Rejects Trump's Claim Of ‘For Cause’ Removal Over Mortgage Fraud Probe
Trump had argued that the investigation into Cook constituted cause for dismissal.
The court disagreed, finding that the ability to fire Fed officials is "not absolute and limited to actions taken in office."
Pulte's Mortgage Fraud Allegations Against Cook Sparked DOJ Probe
Last week, Bill Pulte, director of the Federal Housing Finance Agency and an ally of Trump, accused Cook of improperly claiming multiple homes as her primary residence.
Pulte argued that Cook committed fraud by securing "homestead exemptions" on more than one property and referred the matter to the Justice Department, prompting a federal probe.
Pulte also took his allegations public, on X, saying that "financial fraud is a big deal" and later criticizing Cook for renting out one of the homes she had declared as her primary residence. "Lisa Cook's declared ‘PRIMARY RESIDENCE' is being RENTED out to tenants," he wrote.
Cook denied the accusations. Through her attorney, she said her property filings did not constitute fraud and that the allegations were unfounded.
Warren Slams Trump's Fed Firing As Ackman Urges Cook To Respond
Trump's decision to remove Lisa Cook "for cause," citing "deceitful and potentially criminal conduct" based on a referral from the FHFA agency.
Last month, billionaire investor Bill Ackman weighed in on the feud, urging Cook to address allegations of mortgage fraud directly and stressing that the integrity of the financial system was at stake.
He argued that it should have been simple for Cook to disprove the claims, noting that evidence from FHFA Director Pulte strongly suggested misconduct.
Cook's lawyer, Abbe Lowell, rejected the dismissal as baseless and announced plans to challenge it in court.
Trump's firing of Cook marked the first such action in the Federal Reserve's 111-year history, breaking with tradition meant to insulate the central bank from political pressure.
Sen. Elizabeth Warren (D-Mass.) condemned the move as an "authoritarian power grab," accusing Trump of using Cook as a scapegoat to distract from his economic failures.
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