Federal Judge Blocks Trump From Removing Fed Governor Lisa Cook

Judge Blocks Trump: Court Stops Fed Governor Firing Amid Legal Battle

A U.S. federal judge has temporarily stopped President Donald Trump from removing Federal Reserve Governor Lisa Cook, giving the U.S. President a challenge in a legal battle that could reshape how independent the central bank really is. The dispute is unprecedented and has broad implications for U.S. monetary policy, financial markets, and even cryptocurrencies. 

Source: X

But the question is whether the judge blocks trump on any specific basis, is there any supportive law or the prevention of dominating powers?

Why the Court Stepped In

On Tuesday night, District Judge Jia Cobb granted a preliminary injunction (a temporary legal order) that prevents Cook’s termination for now. This order will be in effect until her case against the White House continues.

Following the order, Cobb stated that the law creating the Federal Reserve only allowed removal of governors on the basis of misconduct while in office, not just because the President wants to. Since the mortgage fraud claims against Lisa are about things that happened before she became a Fed governor, the judge said President Trump probably doesn’t have the right to fire her over them. 

Allegations of Mortgage Fraud

On August 25, Trump said he was firing Lisa Cook under the accusations from William Pulte, head of the Federal Housing Finance Agency, who claimed Cook gave false information about three homes on old mortgage applications. In response, the governor says she did nothing wrong. 

The Justice Department is investigating the case as a possible crime, so far they haven’t charged her with anything. Following that Lisa Cook became the first black woman to serve as a Federal Reserve governor in 2022. 

Impact on the Fed’s Next Meeting

Trump has often called for big rate cuts. He has criticized and even tried to remove Fed Chair Jerome Powell for not acting fast enough. If Cook were removed, Trump could choose her replacement, which would give him more control over the Fed’s seven-member board.

But now because of the Judge’s decision, Cook will still take part in the Federal Reserve's policy meeting scheduled on September 16–17. The meeting is supposed to lower interest rates for the first time after 2024, which make it crucial for both traditional and crypto investors. 

How Does It Matters for Crypto?

For Crypto Market and traders, the case is more than political drama. It could shape the future of U.S. monetary policy, a thing which matters most for the digital assets space. 

Central Bank Independence:  Investors might worry if presidents could fire Fed governors anytime, as it could be used for political purposes. This could lead  people into decentralized assets like Bitcoin, which are not controlled by any government.

Interest Rate Cuts: Lower rates can weaken the dollar, making Bitcoin and Ethereum more acceptable or approaching. Since Cook stayed on the Fed, decisions are likely not favouring politics, especially ruling one.

Market Volatility:  If the Fed seems under politics, it could shake both regular markets and crypto spaces. Traders often consider Bitcoin as a safe option during uncertainty and this could lead to its new rally or options for others.

A Crucial result Under Process

This is the first time a ruling president has tried to fire a Fed governor in U.S. history. No court has ever ruled on this law before, so this case is very important for deciding how much independence the central bank really has from the White House.

Whatever the decision is, the involvement of the governor is secured in the upcoming major meeting. But nothing is sure, even for minutes after happenings, then there are still some days left for the gathering, so, let’s see.