A federal judge temporarily prevented President Donald Trump from firing Fed Gov. Lisa Cook, who is a board member responsible for setting U.S. interest rates.
The ruling is a victory for the central bank to win in an unprecedented legal battle for the Fed’s independence.
last month, Trump says he has fired Ms. Cook But the Fed said she is still governor.
“President Trump has not identified board members related to Cook’s behavior or work performance, which shows that she is injuring the board or the public interest by infidelity or ineffectively performing her duties.”
The Fed declined to comment on the ruling, but had previously stated that it would comply with the court’s ruling.
The BBC has contacted the White House for comment.
Trump has repeatedly criticized the Fed, especially its chairman Jerome Powell, for not lowering interest rates, while central banks in Europe and the UK have reduced borrowing costs.
The Fed cuts as it assesses the impact of Trump’s tariffs on inflation.
Ms. Cook’s attorney Abbe David Lowell said: “This ruling acknowledges and reaffirms the importance of protecting the Fed from illegal political intervention.
“Governor Cook will continue to serve as the oath of chairman confirmed by the Senate.”
Ms. Cook sued Trump for firea potential legal battle has an impact on the autonomy of the US central bank.
Trump and Federal Housing and Monetary Administration Commissioner William Pulte claimed Ms. Cook inaccurately described three different properties on a mortgage application, which could have given her lower interest rate and tax credits.
The law that established the Fed says that governors can only delete “for reasons” but cannot define what this means or how it is done in practice.
This is the first time the president has tried to fire the Fed governor, and the law has not been verified in court.
Judge Cobb wrote: “The best reading of the ‘fan for as Auts’ provision is that the basis for dismissal of the committee is limited to reasons regarding the governor’s actions in the office and whether they faithfully and effectively perform their statutory duties.
“So, ‘so, it is not considered to be purely for the purpose of evacuating an individual before taking office.”
The case – which may eventually end up in the U.S. Supreme Court – is considered crucial to the central bank’s ability to set interest rates without political influence.
The Fed is scheduled to meet next week and is expected to announce its first rate cut since September 2024.
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