Judge blocks Trump from removing Fed governor Lisa Cook

A federal judge in Washington on Tuesday blocked President Donald Trump's decision to remove Lisa Cook from the Federal Reserve Board of Governors. Judge Jia Cobb granted a temporary injunction that will allow Cook to remain in office while the lawsuit challenging her removal proceeds.

The ruling comes on the eve of the Federal Reserve's next monetary policy meeting, scheduled for Sept. 16-17, and marks a new chapter in the tension between the White House and the central bank. Judge Cobb argued that Cook has “a substantial likelihood” of proving that the Trump Administration violated the Federal Reserve Act, which stipulates that its members may only be removed for just cause.

Trump had announced Cook's departure following allegations of mortgage fraud, aired days earlier by Federal Housing Finance Agency director Bill Pulte. Although the Justice Department opened an investigation, Cook's lawyers deny any misconduct and maintain that she was never given an opportunity to defend herself. According to them, the president's real goal is to open a seat on the board to appoint an ally and push for rate cuts.

The defense celebrated the court decision as a victory for central bank independence. "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," said attorney Abbe Lowell.

The case, considered unprecedented, could soon escalate to the Supreme Court and set a precedent on the limits of presidential power vis-à-vis an institution designed to function without political interference. Cook, a Joe Biden appointee, has a term until 2038 and, for now, will remain in her post while the legal battle continues.