A U.S. appeals court declined on Monday (September 15, 2025) to allow Donald Trump to fire Federal Reserve Governor Lisa Cook – the first time a president has pursued such action since the central bank’s founding in 1913 – in the latest step in a legal battle that threatens the Fed’s longstanding independence.
The decision by the U.S. Court of Appeals for the District of Columbia Circuit means that Ms. Cook can for now remain at the Fed ahead of its policy meeting on Tuesday (September 16, 2025) and Wednesday (September 17, 2025) where it is expected to cut U.S. interest rates to shore up a cooling labour market.
The D.C. Circuit denied the Justice Department’s request to put on hold a judge’s order temporarily blocking the Republican president from removing Ms. Cook, an appointee of Democratic former President Joe Biden. The administration is expected to appeal the ruling to the U.S. Supreme Court.
The decision was 2-1, with Circuit Judges Bradley Garcia and J. Michelle Childs in the majority, both of whom were appointed by President Joe Biden. Circuit Judge Gregory Katsas, a Mr. Trump appointee, dissented.
U.S. District Judge Jia Cobb had ruled on September 9 that Mr. Trump’s claims that Ms. Cook committed mortgage fraud before taking office, which Ms. Cook denies, likely were not sufficient grounds for removal under the law that created the Fed.
A White House spokesperson did not immediately respond to a request for comment.
For Cause
In setting up the Fed, Congress included provisions to shield the central bank from political interference. Under the law that created the Fed, its governors may be removed by a president only “for cause,” though the law does not define the term nor establish procedures for removal. No president has ever removed a Fed governor, and the law has never been tested in court.
Ms. Cook, the first Black woman to serve as a Fed governor, sued Mr. Trump and the Fed in late August. Ms. Cook has said the claims did not give Mr. Trump the legal authority to remove her and were a pretext to fire her for her monetary policy stance.
The Trump administration has argued that the president has broad discretion to determine when it is necessary to remove a Fed governor, and that courts lack the power to review those decisions.
The case has ramifications for the Fed’s ability to set interest rates without regard to the wishes of politicians, widely seen as critical to any central bank’s ability to function independently to carry out tasks such as keeping inflation under control.
Mr. Trump this year has demanded that the Fed cut rates aggressively, berating Fed Chair Jerome Powell for his stewardship over monetary policy. The Fed, focusing on fighting inflation, has not done so, though it is expected this week to make a cut.
The Supreme Court this year has allowed Mr. Trump to proceed with the removal of various officials serving on federal agencies that had been established by Congress as independent from direct presidential control.
But in a May order in a case involving Mr. Trump’s dismissal of two Democratic members of federal labour boards, the Supreme Court signalled that it views the Fed as distinct from other executive branch agencies. It said the Fed “is a uniquely structured, quasi-private entity” with a singular historical tradition.
The Trump administration in a court filing on Thursday (September 11, 2025) had asked the D.C. Circuit to move quickly so that Mr. Trump could remove Ms. Cook before the Fed’s policy meeting on Tuesday (September 16, 2025) and Wednesday (September 17, 2025). Administration lawyers said that allowing the president to fire Ms. Cook would “strengthen, not diminish, the Federal Reserve’s integrity.”
Ms. Cook’s lawyers in a filing in response said removing Ms. Cook ahead of the meeting would impact U.S. and foreign markets, and that the public interest in keeping her in office outweighed Mr. Trump’s efforts to take control of the Fed.
In blocking Ms. Cook’s removal, the judge found that the “best reading” of the 1913 law is that it only allows a Fed governor to be removed for misconduct while in office. The mortgage fraud claims against Ms. Cook all relate to actions she took prior to her U.S. Senate confirmation in 2022.
Mr. Trump and his appointee William Pulte, the Federal Housing Finance Agency director, have claimed that Ms. Cook inaccurately described three separate properties on mortgage applications, which could have allowed her to obtain lower interest rates and tax credits.
A loan estimate for an Atlanta home purchased by Ms. Cook shows that she had declared the property as a “vacation home,” according to a document reviewed by Reuters, information that would appear to undercut the allegations against her. And the property tax authority in Ann Arbor, Michigan, said in response to a Reuters inquiry that Ms. Cook has not broken rules for tax breaks on a home there that Ms. Cook had declared her primary residence.
The finding, which came in response to a Reuters request that the city review Ms. Cook’s property records, could boost Ms. Cook’s defense against efforts by the Trump administration to remove her from the Federal Reserve board.
Mr. Trump’s Justice Department also has launched a criminal mortgage fraud probe into Ms. Cook and has issued grand jury subpoenas out of both Georgia and Michigan, according to documents seen by Reuters and a source familiar with the matter.
Miran gets Senate nod to join Fed board
The U.S. Senate on Monday (September 15, 2025) narrowly confirmed Stephen Miran to the Federal Reserve’s Board of Governors, expanding President Donald Trump’s influence over the world’s most important central bank and handing his top economic adviser one of 12 interest-rate-setting votes on the eve of a key policy meeting.
The 48-47, largely party-line vote in the Republican-controlled Senate on Monday (September 15, 2025) marked the final step of a swift process that began in August when Adriana Kugler resigned unexpectedly as a Fed governor. That created an opening on the seven-member Fed board for Mr. Trump to fill with someone more amenable to lowering interest rates, as the president has demanded for all year.
Senator Lisa Murkowski of Alaska was the lone vote against Mr. Miran from Republicans.
It typically takes months for a Fed governor nominee to be confirmed by the Senate; in Mr. Miran’s case it took fewer than six weeks.
Pending the completion of paperwork and his swearing-in, Mr. Miran will take part in the U.S. central bank’s two-day policy meeting that starts on Tuesday (September 15, 2025). Fed policymakers are expected to approve a quarter-percentage-point rate cut to support a weakening labour market at the end of the meeting on Wednesday.
Analysts anticipate that Mr. Miran will dissent on the policy decision in favour of a bigger rate cut, though not necessarily the several-percentage-point reduction that Mr. Trump has demanded.
As the head of the White House’s Council of Economic Advisers, Mr. Miran has repeatedly said he believes the Republican president’s hefty import tariffs won’t cause inflation and that the president’s other policies, including his immigration crackdown, will ease broad price pressures by reducing demand for housing.
As the newest Fed board member, Mr. Miran would have responsibilities that extend beyond voting on interest rates; governors typically serve on several committees with remits including U.S. financial regulation and supervision, community banking, and staffing and budget decisions for the U.S. central bank’s system as well as its 12 regional banks.
Mr. Miran will retain his White House job but go on unpaid leave while he serves at the Fed for a term that expires January 31, although he could stay on indefinitely if a successor for his Fed seat has not yet been picked and confirmed.
Democrats say the arrangement makes him a Mr. Trump “puppet,” a charge that Mr. Miran denies.
Two other Fed governors appointed by Mr. Trump in his first term – Michelle Bowman and Christopher Waller – dissented during the July 29-30 meeting in favour of easier policy, and analysts say weaker-than-expected labour market data since that time could move them to dissent again in September in favour of a larger rate reduction than the quarter of a percentage point broadly priced in by financial markets.
A triple dissent by Fed governors has not occurred since 1988, early in former Fed Chair Alan Greenspan’s term.
