2–1 D.C. Circuit ruling keeps Lisa Cook at the table as Trump’s nominee Stephen Miran joins the board ahead of this week’s FOMC meeting

The U.S. Court of Appeals for the District of Columbia Circuit late Monday rejected an eleventh-hour bid by President Donald Trump to sideline Federal Reserve Governor Lisa D. Cook ahead of this week’s policy meeting, denying an emergency request to pause a lower-court ruling that put Cook back in her seat while the case proceeds.

In a 2–1 decision, the panel—Judges J. Michelle Childs and Bradley N. Garcia in the majority, with Judge Gregory G. Katsas dissenting—left intact a district court order that found Cook was likely denied basic due process when the White House sought to remove her without a formal hearing.

The immediate effect is straightforward: Cook will be in the room as the Federal Open Market Committee convenes its September 16–17 meeting. The Fed is widely expected to consider its first interest-rate cut since December, but officials are divided over the size of the move and how quickly to proceed thereafter.

The White House did not immediately respond to a request for comment on the ruling. Administration lawyers have signaled they plan to seek emergency relief from the U.S. Supreme Court, arguing the president has authority to remove a Federal Reserve governor “for cause.” Cook, a Biden appointee confirmed in 2022 and reappointed in 2023, is serving a term that runs through 2038.

Trump ordered Cook’s removal last month, citing allegations of mortgage fraud stemming from 2021 paperwork in which she allegedly claimed two properties as primary residences. Cook has denied wrongdoing; her attorneys say the accusations are a pretext to punish a policymaker the administration views as insufficiently supportive of rapid rate cuts. The appeals court majority did not address whether the allegations could amount to “just cause,” instead finding that Cook’s due process claims were likely to succeed at this stage.

The confrontation marks the first time a president has sought to oust a sitting Fed governor since the central bank was founded in 1913—an extraordinary escalation in the long-running tug-of-war over the Fed’s independence. The institution’s seven governors serve staggered, 14‑year terms specifically to insulate monetary policy from day‑to‑day politics.

WHY IT MATTERS: The ruling means Cook keeps her vote as the Fed debates whether—and by how much—to reduce borrowing costs. It also sets an important marker on presidential power over the central bank, at a moment when the administration has intensified public and private pressure for faster rate cuts.

The legal stakes are significant. In recent years, the Supreme Court has struck down or narrowed several statutory limits on presidential removal authority over independent agencies. But the Fed’s structure—a multi‑member board with fixed, staggered terms—has long been treated as distinct. By focusing on due process rather than the scope of “for cause” removal, the D.C. Circuit left the larger constitutional question for another day, even as it curtailed the White House’s immediate options.

The majority’s reasoning hinged on the rushed process surrounding Cook’s removal. Without an opportunity to review the evidence against her or contest alleged facts, the judges said, Cook was deprived of a meaningful chance to defend her reputation and tenure. Katsas, in dissent, argued the Federal Reserve Act’s removal provision affords the president broad latitude when he determines cause exists, and warned that the court’s intervention risks entangling judges in sensitive personnel disputes at an independent central bank.

The courtroom drama is unfolding alongside a personnel shift that could tilt the policy debate. On Monday the Senate confirmed Stephen I. Miran, a Trump economic adviser, to fill an open seat on the Fed’s Board of Governors. Miran was sworn in Tuesday morning, making him eligible to participate immediately in this week’s meeting. Market analysts expect him to favor a larger rate cut than the quarter‑point move currently priced in by futures.

Cook, an economist who has focused on financial stability and labor‑market dynamics, has generally aligned with Chair Jerome Powell’s cautious approach to easing. Her presence, coupled with Miran’s arrival, adds to the possibility of a split vote and a robust debate over the pace of any cutting cycle.

The mortgage‑fraud allegations emerged this summer from a Trump‑appointed housing official who claimed that in mid‑2021 Cook benefited from more favorable loan terms by designating two properties as primary residences. Reporting and records reviewed by multiple outlets have so far found no clear evidence that Cook violated tax or mortgage rules. Regardless, the appeals court said those contested facts cannot justify short‑circuiting her procedural rights.

Beyond the courtroom, the case is testing institutional norms. Successive administrations have jawboned the Fed, but formal efforts to remake its leadership during a live policy debate are exceedingly rare. Monetary economists warn that even the perception of political interference can lift borrowing costs by injecting uncertainty into the Fed’s reaction function—precisely the opposite of what an administration seeking cheaper credit might intend.

What comes next: The Justice Department can ask the Supreme Court to stay the D.C. Circuit’s order, but such emergency relief is discretionary and, if granted at all, would likely arrive after this week’s decision. The district court will continue to hear Cook’s underlying claims. In parallel, the FOMC will publish its new economic projections on Wednesday, offering a clearer picture of how much easing officials foresee into year‑end.

For now, the upshot is continuity: Cook keeps her chair, Miran takes his, and the Fed meets under an unusually bright political spotlight. Whether the courts ultimately narrow or affirm presidential power over the central bank will shape not only this administration’s relationship with the Fed, but the future contours of American monetary governance.

Sources

Reuters: U.S. appeals court rejects Trump bid to oust Fed’s Lisa Cook (Sept. 16, 2025).

AP News: Fed convenes meeting with a governor newly appointed by Trump and another he wants to oust (Sept. 17, 2025).

Axios: Appeals court rules Fed governor Cook can continue to serve (Sept. 16, 2025).

Federal Reserve Board press release: Stephen I. Miran sworn in (Sept. 16, 2025).