President Donald Trump has appealed a federal court ruling that prevented him from removing Federal Reserve Governor Lisa Cook from her position. The case centers on allegations of mortgage fraud dating back to before Cook's Senate confirmation in 2022, which the Trump administration cites as grounds for her dismissal.
Judge Jia Cobb issued an emergency order blocking the removal, finding that the Federal Reserve Act permits removal only for misconduct occurring during a governor's time in office, not before. The judge rejected the administration's argument that the president has broad authority to remove Fed governors at his discretion, stating that removal cannot be based on "unproven conduct" from before the official's tenure.
The White House, through spokesperson Kush Desai, maintains that "the president lawfully removed Lisa Cook for cause due to credible allegations of mortgage fraud from her highly sensitive position overseeing financial institutions." Cook's attorney, Abbe Lowell, called the ruling a victory for Fed independence, stating it "recognizes and reaffirms the importance of safeguarding the Federal Reserve from illegal political interference."
The legal battle could potentially escalate to the Supreme Court, creating uncertainty about the Federal Reserve's leadership and monetary policy direction. Historically, similar actions by Trump have led to market unrest, and cryptocurrencies like BTC and ETH, which are sensitive to Federal Reserve news, may exhibit increased volatility as the proceedings unfold.