Lisa Cook and the Fed: Court Ruling Before a Key Rate Meeting

A U.S. appeals court declined the Justice Department’s emergency request to lift a temporary block on Lisa Cook’s removal, allowing her to remain on the Federal Reserve Board for now. The decision, issued in mid-September, preserves the status quo at a sensitive moment, since the central bank has been preparing for a policy meeting that could lower short-term interest rates. Because the court refused the appeal, the lower court injunction remains in place while courts consider the larger legal questions.

At the district level, Judge Jia M. Cobb had found that the evidence presented did not clearly show a legally permissible cause for removal and she issued an injunction to protect Cook’s role pending trial. The dispute centers on allegations about two properties bought in 2021 before Cook joined the Fed; Cook has denied the claims and her lawyers have argued that the "for cause" removal standard applies only to conduct while a governor is in office. These fine points of administrative law, which have rarely been litigated, now frame a test of presidential authority over an independent agency.

The ruling also has immediate practical effects: Cook will be able to take part in the Federal Open Market Committee meeting on September 16 and 17, when officials are widely expected to approve a reduction in the key federal funds rate. Meanwhile, the Senate confirmed Stephen Miran to another Fed seat, a development that will change the board’s composition. If the appeals court or the Supreme Court later rules otherwise, Cook’s status could change, but for the moment she can vote on policy matters.