A U.S. District Court judge with personal ties to Federal Reserve Governor Lisa Cook has blocked President Trump’s attempt to remove her, raising questions about impartiality in a case that could reshape presidential authority over the central bank.
Judge Jia Cobb and Cook are members of the Alpha Kappa Alpha sorority, a connection critics say could influence the proceedings.
Cobb issued a preliminary injunction Tuesday, halting Trump’s removal order.
The decision ensures Cook will retain her position and participate in the Federal Reserve’s upcoming September meeting, where interest rate cuts are expected to be discussed.
Trump had announced Cook’s removal on Aug. 25, citing two criminal referrals from Federal Housing Finance Agency Director Bill Pulte.
The referrals alleged Cook falsified mortgage applications and misrepresented the status of properties in Michigan, Georgia and Massachusetts.
Pulte claimed Cook improperly designated more than one property as her “primary residence” and disguised an investment condominium as a second home to receive more favorable loan terms.
In court filings, Cook acknowledged clerical mistakes in the paperwork but denied intentional fraud.
Trump, however, relied on his constitutional authority and the Federal Reserve Act of 1913 in a letter declaring Cook’s removal “effective immediately,” according to The Gateway Pundit.
Judge Cobb disagreed, ruling that Trump lacked sufficient grounds.
She found that the “for cause” provision in the Federal Reserve Act applies only to conduct while a governor is in office, not actions predating the appointment.
Cobb also determined that Cook would face “irreparable harm” if removed and emphasized that preserving the Fed’s independence outweighed the president’s authority.
The case is historic, as no U.S. president has ever attempted to fire a Federal Reserve governor.
Legal analysts predict the dispute could reach the Supreme Court, which may ultimately define the limits of presidential power over the central bank, according to CNBC.
Cook, who became the first black woman to serve as a Fed governor in 2022, remains under scrutiny.
Pulte’s second referral alleged she misrepresented a Cambridge, Massachusetts condominium as a second home, then listed it as an investment property on a government ethics form eight months later.
Investment properties carry higher interest rates than second homes, creating an incentive to misclassify them, per GP.
Trump’s tensions with the Fed have been ongoing.
He has repeatedly pressured Chairman Jerome Powell to cut interest rates and even considered firing him over the summer.
If Cook were removed, Trump would gain another opportunity to nominate a replacement, potentially shifting the board’s balance toward his appointees.
Meanwhile, the Senate Banking Committee is preparing to vote on Trump’s nominee Stephen Miran, chair of the Council of Economic Advisers, to replace outgoing Fed Governor Adriana Kugler.
That vote is scheduled for Wednesday.
Cook’s attorney, Abbe Lowell, hailed Cobb’s ruling as a victory for central bank independence.
“Today’s ruling recognizes and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference,” Lowell said.
He stressed that Cook will continue to carry out her duties as a Senate-confirmed official.
Even with the injunction in place, scrutiny over Cook’s mortgage dealings and Cobb’s decision not to recuse herself due to personal ties continues.
With criminal referrals pending and a potential Supreme Court showdown, the case remains a focal point for law, politics, and conflicts of interest at the highest levels.
