A federal judge on Tuesday granted a temporary restraining order blocking President Donald Trump’s firing of Federal Reserve governor Lisa Cook for now.
The ruling means Cook will remain on the board of the central bank until her case is heard at length. She is allowed to continue carrying out her work during that time.
In granting the order, Judge Jia Cobb said “the Court will enter an injunction directing [Fed Chair Jerome] Powell and the Board of Governors to allow Cook to continue to operate as a member of the Board for the pendency of this litigation.”
“The public interest in Federal Reserve independence weighs in favor of Cook’s reinstatement,” the judge also wrote. “That independence is critical in helping the nation’s ‘banking system to promote stability.'”
Lawyers for Cook argued in federal court in Washington, D.C., that Trump’s attempt to fire her for “mortgage fraud” was illegal and lacked “cause,” which is the only reason that a Fed governor can be removed. “Cause” is commonly understood to be some kind of wrongdoing.
The judge will hear the merits of the case in more detail at a future hearing.
Trump moved to fire Cook in late August, citing allegations of mortgage fraud brought by one of the president’s political appointees. Cook hasn’t been charged with any crime.
“Governor Cook did not ever commit mortgage fraud,” Cook’s lawyers wrote in a filing last week.
The Federal Reserve declined to comment on the judge’s order but previously said in a statement that it would “abide by any court decision.”
“Today’s ruling recognizes and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference,” said Abbe Lowell, who is representing Cook, 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. Governor Cook will continue to carry out her sworn duties as a Senate-confirmed Board Governor.”
Cook is the first Black woman to serve as a governor on the board of the Fed in its more than 110-year history. Before joining the Fed, she was a professor of economics and international relations at Michigan State University.
The Federal Reserve sets the federal interest rate, which can impact everything from from your mortgage to your car loans. Here’s what you need to know.
