Trump’s momentum is starting to wane. The Left has filed countless lawsuits to ensure it.
And now a federal appeals court slammed the breaks on Trump’s agenda with this consequential ruling.
Trump’s Case for Firing Lisa Cook
President Donald Trump’s attempt to remove Federal Reserve Governor Lisa Cook, blocked by a 2-1 ruling from the U.S. Court of Appeals for the D.C. Circuit on September 15, hinges on allegations of mortgage fraud, which the Trump administration argues undermines her credibility in a role critical to financial oversight.
The Justice Department, in its appeal, asserted, “When Governors by misconduct or gross neglect erode the foundations of such confidence, the President acts properly and lawfully by removing them.”
This position reflects Trump’s broader effort to ensure accountability at the Federal Reserve, particularly as he contends with its handling of economic challenges.
The case, now likely headed to the Supreme Court, marks the first presidential attempt to oust a Fed governor “for cause,” testing the legal boundaries of the Federal Reserve Act’s removal provisions.
Trump’s move is rooted in his view that Cook’s alleged pre-appointment misconduct—falsifying mortgage applications to secure favorable terms—disqualifies her from serving on a board responsible for maintaining public trust in the nation’s financial system.
Federal Reserve’s Economic Mismanagement
Trump’s push to remove Cook aligns with his critique of the Federal Reserve’s inability to effectively balance inflation and job market stability, a core mandate of the central bank.
Since early 2025, the Fed has maintained interest rates between 4.25% and 4.5%, despite Trump’s calls for significant cuts to stimulate economic growth. High interest rates, intended to curb inflation, have strained the job market, with recent data showing a weakening labor sector.
Economists, as noted in reports, expect a quarter-point rate cut at the Fed’s September 16, meeting, but Trump argues this is insufficient given persistent inflationary pressures from his trade policies and global market volatility.
By seeking to replace Cook, a Biden appointee, Trump aims to reshape the Fed’s Board of Governors to favor policies that prioritize economic expansion over cautious inflation controls, which he views as stifling job creation. The Fed’s reluctance to adjust rates swiftly, Trump contends, risks prolonged economic stagnation, justifying his intervention to ensure the board reflects his economic priorities.
Legal and Institutional Implications
The D.C. Circuit’s decision, with Judges Michelle Childs and Brad Garcia upholding U.S. District Judge Jia Cobb’s injunction, maintains Cook’s position pending further litigation, citing her due process rights and the Federal Reserve Act’s “for cause” requirement.
Cobb’s ruling emphasized that Trump’s cited cause—mortgage fraud allegations from before Cook’s 2022 Senate confirmation—does not meet the legal threshold, as it pertains to conduct outside her official duties.
However, Trump’s legal team argues that the president holds broad discretion to determine “cause,” and courts should have limited authority to review such decisions. This clash underscores Trump’s rationale: the Fed’s independence, while critical, should not shield governors from accountability for actions that undermine public confidence.
If successful, Cook’s removal would allow Trump to appoint a majority of the seven-member board, enhancing his influence over monetary policy. The case’s trajectory toward the Supreme Court highlights its significance in defining presidential power over the Fed, particularly when its policies fail to address the dual mandate of price stability and full employment effectively.
