FILE-Lisa Cook testifies during a Senate Banking nominations hearing on June 21, 2023 in Washington, D.C. (Photo by Drew Angerer/Getty Images)
A federal court ruled Federal Reserve Gov. Lisa Cook can remain in her position amid President Donald Trump’s attempts to fire her.
U.S. District Judge Jia Cobb late Tuesday granted Cook’s request for a preliminary injunction blocking her firing and ruled that Cook would likely succeed in an August lawsuit she filed against Trump over his effort to oust her from the Federal Reserve.
The Associated Press reported that the court decision means Cook can participate in the Federal Reserve’s meeting Sept. 16-17, when it is expected to lower its key short-term rate by a quarter-point to between 4% and 4.25%.
Why is Trump trying to fire Lisa Cook?
Dig deeper:
President Donald Trump said he was firing Lisa Cook on Aug. 25 over allegations broached by one of his appointees that she committed mortgage fraud related to two properties she purchased in Ann Arbor, Michigan, and Atlanta in 2021, before she joined the Federal Reserve.
RELATED: Trump says he’s firing Fed Governor Lisa Cook amid allegations of mortgage fraud
The Associated Press reported that Cook is accused of saying the properties were “primary residences,” which could have resulted in lower down payments and mortgage rates than if either was designated a second home or investment property.
But U.S. District Judge Jia Cobb ruled that the allegations likely weren’t sufficient legal cause to fire Cook.
The “removal of a Federal Reserve Governor extends only to concerns about the Board member’s ability to effectively and faithfully execute their statutory duties, in light of events that have occurred while they are in office,” Cobb wrote, the AP reported.
“President Trump has not stated a legally permissible cause for Cook’s removal,” the AP, citing the ruling.
Can Trump fire Cook?
Big picture view:
According to the Associated Press, the law allows a president to fire a Fed governor “for cause,” which means some type of wrongdoing or negligence of duty.
The AP noted that a president cannot fire a governor only because of differences over interest rate policy. Moreover, creating a for-cause removal requires some form of proceeding that would allow Lisa Cook to answer the charges and present evidence, legal experts told the AP, which hasn’t happened in this case.
According to the AP, if Trump can replace Cook, he possibly gains a 4-3 majority on the Fed’s governing board. Trump appointed two board members during his first term in office and has nominated a key White House economic adviser, Stephen Miran, to replace Adriana Kugler, another Fed governor who stepped down unexpectedly Aug. 1.
The Source: Information for this story was provided by previous LIVENOW from FOX reporting and the Associated Press. This story was reported from Washington, D.C.