Lisa Cook’s Position Safeguarded By Federal Court

The showdown between Donald Trump and the American Federal Reserve reaches an unprecedented threshold. On September 9, the federal court suspended the dismissal of Lisa Cook, Fed governor, decided by the American president. A rare decision that highlights the major stake of this conflict : the independence of the central bank against political pressures. Ahead of a strategic meeting on rates, this judicial halt revives the debate on the limits of executive power in conducting monetary policy.

An dismissal interrupted by the court

On August 25, Donald Trump announced the immediate dismissal of Lisa Cook, governor of the Federal Reserve, without providing detailed public justification, while the Fed resisted him and had just maintained rates. However, on September 9, American justice suspended this decision, considering that it could be illegal.

Federal Judge Jia Cobb deemed that there was no valid cause to justify this dismissal, as the law governing responsibilities within the Fed requires. She emphasized that Lisa Cook had strong chances to argue that her dismissal violates the regulations applicable to members of the board of governors.

Here are the main facts to remember about this case :

• An unprecedented judicial decision : the judge blocked Cook’s dismissal pending the substantive examination of her appeal, one week before a decisive Fed meeting on interest rates.

• A clear legal provision : the Supreme Court recently reminded that Fed governors can only be dismissed for valid reasons, such as failure to fulfill their duties or professional misconduct.

• A historic first : according to Judge Cobb, this attempted dismissal is a unique case in the Fed’s 111-year history.

Cook claims that Trump violated the law by acting without legal justification, relying on alleged facts prior to her appointment.

The suspension of Lisa Cook’s dismissal does not close the case, but marks a significant turning point. American justice sent a clear signal about the need to respect the independence of the central bank against possible political maneuvers.

The substance of the case will be examined later, but the provisional maintenance of the governor in her duties already sends a strong message to the executive.

An attempted interference based on economic strategy

According to accusations relayed by the Trump administration, Lisa Cook allegedly lied to obtain preferential rate mortgage loans in 2021. However, as Judge Cobb emphasized, these alleged facts are prior to her taking office and cannot constitute a legal reason for dismissal.

In her decision, the magistrate writes that “valid cause does not envisage dismissing a person solely for facts that occurred before taking office”. This line of defense is a central point of the appeal filed by the governor.

However, beyond the legal elements, it is indeed the institutional and political dimension that dominates. Lisa Cook’s lawyer, Abbe David Lowell, stated that the court decision “recognizes and reaffirms the importance of preserving the independence of the Federal Reserve against any illegal political interference”.

He warned of the potential consequences of a dismissal without legal basis, emphasizing that it “would jeopardize the stability of our financial system and undermine the rule of law”. Donald Trump, for his part, did not comment on the decision, blatantly ignoring a journalist’s question on the subject.

In this climate where the independence of central banks becomes a political stake, the role of decentralized assets like bitcoin takes on a new dimension.

If Trump’s attempt had succeeded, it would have allowed him to appoint a figure more aligned with his economic positions, like the appointment of Stephen Miran, at a time when he exerts increasing pressure on the Fed for rate cuts. The maintenance of Lisa Cook can thus be interpreted as a barrier lifted against the politicization of the institution.