A U.S. appeals court has rejected Donald Trump’s last-minute attempt to remove Federal Reserve governor Lisa Cook, allowing her to remain ahead of a crucial interest rates decision. The 2-1 ruling from the Court of Appeals for the District of Columbia is a significant setback for Trump, who has been pressuring the Fed to cut borrowing costs.
Trump had sought to oust Cook over allegations of mortgage fraud, citing documents shared by his ally Bill Pulte, director of the Federal Housing Finance Agency. The claims suggest Cook declared two different properties as principal residences to gain better loan and tax terms, but she has denied wrongdoing and has not been charged.
The appeals court said Cook had a “strong likelihood of success” in her argument that her dismissal violated due process. Judges Michelle Childs and Bradley Garcia, both Biden appointees, emphasized that protections for Fed governors were designed to safeguard the central bank’s independence from political interference.
Judge Gregory Katsas, a Trump appointee, dissented, saying the lower court’s findings were “mistaken” and that the balance favored the government. The Justice Department is investigating Pulte’s claims, though evidence seen by the Financial Times suggests Cook labeled the Atlanta property in question as a vacation home.
The court ruling comes just hours before the Federal Open Market Committee begins its meeting on whether to cut interest rates for the first time this year. A quarter-point cut from the current 4.25%–4.5% range is widely expected, though some governors, including Christopher Waller and newcomer Stephen Miran, could push for a larger half-point cut.
Trump has repeatedly urged the Fed to slash rates aggressively, calling on Truth Social for “MUST CUT INTEREST RATES, NOW, AND BIGGER THAN HE HAD IN MIND.” He has even suggested lowering rates to 1%, a level typically associated with economies in crisis, to stimulate growth and reduce government borrowing costs.
Minutes after the Cook ruling, the Senate confirmed Trump’s nominee Stephen Miran to the Fed in a narrow 48-47 vote. Miran, who replaces Adriana Kugler, will continue leading the Council of Economic Advisers but take a leave of absence during his Fed service, a move critics say contradicts his past warnings against a “revolving door” between institutions.
Senate minority leader Chuck Schumer condemned Miran as “Donald Trump’s mouthpiece at the Fed,” while Republican Tim Scott expressed confidence in his independence. Senator Lisa Murkowski was the only Republican to oppose the confirmation, citing concerns over his dual roles at the White House and the Fed.
