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US Appeals Court Blocks Trump's Removal of Cook, Renewing Judicial Defence for the Fed's Independence (1) On Monday, Eastern Time, the US Court of Appeals for the District of Columbia Circuit rejected the Justice Department's request for a temporary injunction to stay President Trump's removal of Federal Reserve Governor Lisa Cook, paving the way for her to attend the FOMC meeting on Tuesday and Wednesday, where the Fed is widely expected to announce an interest rate cut to support the cooling labor market. (2) Trump had previously accused Cook of engaging in mortgage fraud before taking office, which Cook denied. Last week, a district court judge ruled that the allegations were insufficiently based and did not meet the "removal for cause" standard under the Federal Reserve Act of 1913. The appeals court's ruling allows that ruling to remain in effect and does not grant a stay to the Justice Department's request. (3) According to the 1913 law establishing the Federal Reserve, the president can only remove a governor for cause. However, the law neither defines "cause" nor sets out a procedure. To date, no president has successfully removed a governor, and the relevant provisions have never been tested by the Supreme Court. Neither the White House nor Cook's lawyers were immediately available for comment. The Fed did not comment on the ruling, only urging the court to resolve it swiftly. (4) The outcome of this case hinges on whether the central bank can set interest rates free from political interference, a principle widely considered a core prerequisite for its functions, including controlling inflation. Since taking office, Trump has publicly pressured Fed Chairman Powell to cut interest rates, but the Fed, focused on combating inflation, has previously refused to comply. If the rate cut goes ahead this week, Cook's continued tenure will protect the Fed's independence from immediate political disruption.