A US appeals court has declined to grant Donald Trump’s request to remove Federal Reserve Governor Lisa Cook, citing due process concerns. The decision by the US Court of Appeals for the District of Columbia Circuit means the administration has a limited window to appeal to the US Supreme Court if it hopes to block Cook’s attendance at the Fed’s upcoming policy meeting.
The meeting, scheduled for Tuesday and Wednesday, is expected to focus on cutting US interest rates to support a cooling labor market. The D.C. Circuit’s ruling denied the Justice Department’s request to put on hold a lower court’s order temporarily blocking Trump from removing Cook, who was appointed by former President Joe Biden.
US District Judge Jia Cobb had previously ruled that Trump’s claims of mortgage fraud against Cook were likely insufficient grounds for removal under the law governing the Federal Reserve. Cook has denied the allegations. The appeals court’s decision was split 2-1, with Circuit Judges Bradley Garcia and J. Michelle Childs, both Biden appointees, forming the majority. Circuit Judge Gregory Katsas, a Trump appointee, dissented.
In their opinion, Garcia and Childs noted that Cook is likely to prevail on her claim that she was denied due process in violation of the US Constitution’s Fifth Amendment. The judges highlighted that the government had provided Cook with no meaningful notice or opportunity to respond to the allegations against her. The Federal Reserve has not made any legal arguments in the case and has stated that it will abide by any court ruling.
The administration now faces a tight deadline to appeal the decision to the US Supreme Court if it wishes to prevent Cook from attending the policy meeting. The ruling reinforces the importance of due process in the removal of federal officials and underscores the independence of the Federal Reserve. As the US central bank prepares to make key decisions on interest rates, the outcome of this case will be closely watched by financial markets and policymakers alike.