Trump Asks Court to Uphold Firing as Fed Pleads for a “Prompt Ruling” in Cook Fight

President Donald Trump and Federal Reserve Governor Lisa Cook faced a high-stakes courtroom clash on Friday as Cook asked a federal judge to block the White House’s unprecedented bid to remove her from the central bank and the Fed signaled it would not take sides — but asked the court to decide quickly. The dispute, which Cook’s lawyers call an illegal power grab, threatens to reshape long-standing norms protecting Federal Reserve independence and could ultimately land before the U.S. Supreme Court.

What happened

On Aug. 28, Cook — a Biden appointee confirmed in 2022 and the first Black woman to sit on the Fed’s Board of Governors — filed suit in U.S. District Court in Washington seeking a temporary restraining order that would block the White House from implementing President Trump’s announcement two days earlier that he was removing her “for cause.” The complaint says the president lacks legal authority to oust a Fed governor except for statutorily defined “cause,” and that the mortgage-related allegations cited by the White House do not meet that standard. Cook’s motion asks the court to preserve the status quo while the litigation proceeds. 

Cook’s lawyers argued in court papers that even if the factual allegations were true, they would not amount to “cause” under statutes that generally require inefficiency, neglect of duty or malfeasance while in office. “The President would not have ‘cause’ to remove a Federal Reserve Governor even if he possessed smoking-gun evidence that she jaywalked in college,” the filing said, underscoring the unusually broad legal question at the center of the dispute. 

The White House position

The White House has defended the move. A White House spokesperson reiterated that the president exercised “lawful authority” in announcing Cook’s removal, and the administration has pointed to allegations, first raised publicly by William Pulte, director of the Federal Housing Finance Agency, that Cook misstated the occupancy status of certain properties when applying for mortgages in 2021. The administration has characterized those referrals as a basis for “cause.” 

What the Fed told the court

Rather than join either side, the Federal Reserve told the court that it would “abide by any court decision” — and did not take a substantive position in the legal fight. Reporters following the filings said the Fed’s submission asked U.S. District Judge Jia M. Cobb only for a prompt ruling so that the status of the board could be resolved quickly. (A post from POLITICO reporter Kyle Cheney summarized the Fed’s posture as taking “no position…just asks Judge Cobb for a prompt ruling that they vow to abide by.”)

Legal stakes and precedents

The Federal Reserve Act permits a president to remove a governor “for cause,” but it does not define that term. No president in the Fed’s more than century-long history has ever fired a sitting governor, and the statute has not been fully tested in court, making this case legally novel. Legal scholars say a ruling for Cook could reinforce institutional protections for the central bank; a ruling for the administration could expand executive control over an agency Congress designed to be insulated from day-to-day politics. Either outcome has the potential to reconfigure the balance between the White House and independent regulatory institutions. 

Markets and policy implications

Markets reacted to the initial news of the attempted removal, with the dollar slipping against major currencies amid investor jitters that political interference could destabilize U.S. monetary policy. If Cook is removed and replaced by a Trump ally, the White House could gain an additional sympathetic vote on the Fed’s seven-member Board of Governors — a shift that could increase political pressure on the central bank to cut interest rates sooner and more aggressively than officials otherwise would. The Fed is due to meet Sept. 16-17, and the timing of any ruling could influence monetary policy discussions. 

New allegations and counterclaims

The controversy has intensified as Mr. Pulte’s referral prompted scrutiny and at least two criminal referrals tied to Cook’s mortgage filings have been publicized by Trump allies. Cook has denied wrongdoing and, in court filings, suggested that “clerical errors” might explain inconsistencies in documents and that any pre-appointment conduct should not constitute “cause.” Her legal team — led by veteran Washington litigator Abbe Lowell — painted the ouster as a politically motivated attempt to reshape the Fed rather than a legitimate enforcement action. 

Short-term procedural outlook

Judge Jia M. Cobb scheduled an initial hearing on Cook’s motion for a temporary restraining order for Aug. 29. If the judge issues a TRO or a preliminary injunction, the White House could be blocked from removing Cook while the court considers the full merits. If the court denies interim relief, the White House could move quickly to have the Fed recognize the president’s appointment of a successor. Either way, lawyers and experts say the dispute is likely to be appealed and could end up before the Supreme Court because of the constitutional and institutional questions it raises. The case is docketed as Cook v. Trump, No. 1:25-cv-02903 (D.D.C.).

Analysis — why this matters

At first glance this is a personnel dispute; in constitutional terms, it is much more. The Fed’s unusual hybrid design — appointed, confirmed, insulated by long staggered terms and statutory protections — exists because monetary policy benefits from technical expertise and political distance. The administration’s effort to remove a governor on the strength of pre-appointment allegations, if sustained, would reduce that distance and make the Fed more directly subject to political turnover. The consequences could be profound:

• Monetary-policy credibility. Central bank credibility rests on predictability and insulation from short-term political pressures. If presidents can easily remove governors to build sympathetic voting blocs, markets could doubt the Fed’s commitment to long-term price stability. That doubt can raise risk premia, increase borrowing costs and complicate the Fed’s inflation-fighting remit. 

• Legal precedent. Courts have been reluctant historically to wade into “political question” disputes, but statute gives a private right to challenge a statutory removal. A pro-Cook decision could tighten the “for cause” standard across a variety of independent agencies; a pro-Trump decision could embolden future administrations to use removal authority to reshape regulatory outcomes. Either way, the Supreme Court may be asked to supply the final reading. 

• Timing and optics. The dispute arrives at a delicate moment in the economic cycle — with the Fed widely expected to begin easing and with markets sensitive to signals on rate direction. Legal uncertainty about the composition of the Federal Reserve’s leadership lessens clarity for officials setting policy and for investors expecting a certain path for rates. That practical uncertainty amplifies the constitutional stakes. 

Finally, the Fed’s decision to “take no position” publicly and to ask the court only for a prompt resolution — rather than to intervene forcefully on Cook’s behalf — underscores the central bank’s preference for staying above the partisan fray. But neutrality can only go so far when the institutional rules themselves are the subject of litigation. The coming days and appeals will tell whether the court shields one of America’s most important independent institutions from executive reach — or redraws the boundary between elected power and technocratic governance.