A federal judge has scheduled a hearing for Friday morning regarding Federal Reserve Board Governor Lisa Cook’s request to prevent President Donald Trump from terminating her position. The hearing comes just hours after Cook filed a lawsuit in Washington, D.C., challenging what she describes as an unprecedented attempt by Trump to remove her from the central bank’s board. The lawsuit also names Federal Reserve Chairman Jerome Powell and the board itself as defendants.
The case, which is likely to advance to the Supreme Court, has been assigned to Judge Jia Cobb, appointed by President Joe Biden in late 2021. Cook is seeking a temporary restraining order to block her potential removal while the lawsuit is ongoing. The hearing is set for 10 a.m. ET on Friday.
Trump’s decision to remove Cook stems from allegations of mortgage fraud, claiming she misrepresented her primary residence by listing two properties in 2021 before joining the Fed. Cook’s attorney, Abbe Lowell, dismissed these allegations as “nakedly pretextual,” arguing they fail to establish sufficient grounds for removal even if they were true, which he contends they are not. “This case challenges President Trump’s unprecedented and illegal attempt to remove Governor Cook, which would mark the first of its kind in the Board’s history,” Lowell wrote in the suit.
Cook is asking Judge Cobb to declare Trump’s termination order “unlawful and void,” reaffirming her status as a board member. She contends that the mortgage allegations do not qualify as “cause” for removal, a term defined in the lawsuit as “inefficiency, neglect of duty, malfeasance in office, or comparable misconduct.” The lawsuit notes that Powell and the Fed Board are being sued only insofar as they would need to act on Trump’s purported termination of Cook.
This case is particularly notable as Cook, appointed by Biden in 2022, is the first Black woman to sit on the Federal Reserve’s Board in its 111-year history. She is set to serve until 2038. In response to Cook’s lawsuit, White House spokesman Kush Desai asserted that Trump acted within his “lawful authority” to remove a governor over credible allegations of financial misconduct. “The removal of a governor for cause improves the Federal Reserve Board’s accountability and credibility for both the markets and American people,” Desai stated.
Conversely, Cook’s lawsuit insists that the allegations are a cover for Trump’s intent to undermine the independence of the Federal Reserve. Lowell emphasized in a separate filing that the allegations against Cook are false and that even if they were true, they should not constitute grounds for dismissal, particularly since they occurred prior to her appointment. “The President would not have ’cause’ to remove a Federal Reserve Governor even if he possessed smoking gun evidence that she jaywalked in college,” he argued.
The controversy surrounding Cook’s removal follows months of Trump’s dissatisfaction with the Fed’s interest rate policies. The allegations originated from Bill Pulte, director of the Federal Housing Finance Agency, who has been vocal in his support of Trump’s criticisms of Powell. Pulte’s claims have prompted an investigation by the Department of Justice.
As Cook vows to fulfill her duties despite the turmoil, the pivotal question remains whether the courts will agree that Trump had sufficient grounds to terminate her. Under the Federal Reserve Act, a member can only be removed “for cause,” and it’s worth noting that Cook has not been charged with any crime, including mortgage fraud. If Trump succeeds in removing her, he would effectively control a majority of the Fed Board’s seven members.
This situation continues to evolve, and further updates will clarify its legal ramifications.
Original Source: https://www.cnbc.com/2025/08/28/trump-fed-lisa-cook-lawsuit-powell.html
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Publish Date: 2025-08-28 22:18:00
