The Trump administration asked a federal appeals court on Thursday for an emergency ruling to remove Federal Reserve Governor Lisa Cook from the central bank’s board by Monday, a move aimed at shaping the makeup of the Fed before its next interest-rate decision.
The request follows a federal judge’s ruling earlier this week that the administration’s Aug. 25 attempt to fire Cook was unlawful and that she must be reinstated. U.S. District Judge Jia Cobb said the administration had not met the legal standard that Fed governors may be removed only “for cause,” a standard she said is limited to misconduct while in office.
The administration, in its emergency appeal, argued that Cook’s alleged conduct before she joined the board in 2022 nonetheless bears on her fitness to serve. Trump’s lawyers wrote that the conduct in question “indisputably calls into question Cook’s trustworthiness and whether she can be a responsible steward of the interest rates and economy,” and asked the appeals court to issue a decision by Monday so Cook would be removed if the court rules for the government. If the appeals court grants the appeal, Cook would be removed from the board until the courts ultimately resolve the dispute and would miss next week’s Federal Open Market Committee meeting, the administration said.
Cook has denied the allegations underlying the dismissal attempt, which center on claims that she improperly reported two properties as primary residences in July 2021, before her Fed appointment. Such claims, prosecutors have said, can lead to a lower mortgage rate or smaller down payment than would be permitted if one property had been declared a rental or second home. The White House has called the conduct mortgage fraud; Cook and her legal team have rejected that characterization.
Legal experts have noted the constitutional and statutory stakes. Judge Cobb’s decision emphasized the statutory limit on the president’s removal authority over independent agency officials, saying that “for cause” removal must relate to misconduct while serving as a governor. The administration has signaled it could seek an emergency ruling from the Supreme Court if the appeals court declines to grant its request.
The timing of the litigation has immediate policy implications. The Federal Reserve’s policy-setting committee meets Tuesday and Wednesday next week to consider lowering the central bank’s benchmark interest rate. The Fed is widely expected to approve a quarter-point cut, bringing the target rate to about 4.1 percent, though officials remain divided over the pace and size of reductions.
If the appeals court removes Cook in time, or if the Senate confirms President Trump’s nominee Stephen Miran before the meeting, the composition of the board’s voting bloc could shift. Senate Republicans have accelerated action on Miran’s nomination and could vote as soon as Monday. Miran, a former top economic adviser to the president, would likely support a larger half-point cut, according to administration statements and reporting. Two of Mr. Trump’s other Fed appointees, Christopher Waller and Michelle Bowman, have also indicated receptiveness to larger reductions. But several regional Federal Reserve bank presidents who participate in the committee on a rotating basis have expressed concern about persistent inflation and are expected to oppose a half-point move.
The Fed’s rate decisions are set by 12 voting officials: the seven members of the board of governors and five regional bank presidents. Even a single change in that lineup can affect the balance of votes and the size of any dissent.
Economists say markets have already priced in some easing in borrowing costs ahead of the meeting, with mortgage, auto and business loan rates having fallen in recent weeks. A quarter-point Fed cut typically lowers broader borrowing costs gradually, though the transmission to specific markets varies and depends in part on banks’ decisions and economic conditions.
The administration’s emergency filing represents an unusually aggressive, time-sensitive use of the courts to influence an independent central bank’s composition immediately before a monetary-policy decision. Court filings and public statements from both sides indicate the litigation will proceed rapidly in the coming days.
If the appeals court denies the emergency request, the administration could pursue further review at the Supreme Court, potentially prolonging litigation over Cook’s status. For now, the immediate question is whether the appeals court will act by Monday, a timetable that could determine who sits on the Fed’s board when policymakers set interest-rate policy next week.