Written by Joyce Nzomo
A U.S. appeals court has rejected an attempt by President Donald Trump to remove Federal Reserve Governor Lisa Cook, in a case that could reshape the balance between presidential power and the central bank’s independence.
In a 2-1 ruling on Monday, the U.S. Court of Appeals for the District of Columbia Circuit declined to allow Trump to oust Cook ahead of this week’s Federal Reserve policy meeting, where officials are expected to cut interest rates.
The decision leaves the administration with only hours to appeal to the Supreme Court if it wants to block her participation.
The Justice Department had argued that Trump had broad authority to remove Fed governors, citing unproven allegations of mortgage fraud against Cook. But the court said Cook was denied due process, noting she had not been given notice or an opportunity to respond to the claims. U.S. District Judge Jia Cobb had earlier ruled that the allegations, which Cook denies, did not appear to justify removal under
the 1913 law that created the Fed.
Cook, the first Black woman to serve as a Fed governor, sued Trump and the Fed in August, saying the effort to remove her was politically motivated and tied to her monetary policy stance.
Her case has far- reaching implications for the Fed’s ability to make interest rate decisions without political interference an independence seen as crucial to its role in managing inflation and supporting the U.S. economy.
The Trump administration insists the president has discretion to remove governors, but Monday’s ruling reinforces the Fed’s unique protections. Unlike other agencies where Trump has removed officials, the Fed is considered a “quasi-private entity” with special safeguards against political control.
Courtesy of Reuters
