A federal U.S. appeals court has ruled that President Donald Trump cannot fire Federal Reserve Governor Lisa Cook and that she can remain on the job at the central bank.
The ruling comes as the U.S. Federal Reserve begins its latest policy meeting and decides in coming days whether to lower interest rates.
The Trump administration had sought to remove Cook, a member of the Fed’s board of governors, ahead of the two-day meeting that begins on Sept. 16.
President Trump has demanded that the U.S. Federal Reserve lower interest rates and threatened the central bank’s independence by trying to fire Cook and appoint his own loyalists to the central bank’s board of governors.
Trump has also frequently attacked Federal Reserve Chair Jerome Powell in public for refusing to lower interest rates, and threatened to fire him as well.
However, Trump has backed off his threats to fire Powell, but has instead tried to fire Cook, alleging she committed fraud on past mortgage applications.
Cook has denied committing mortgage fraud and sued the Trump administration to block her firing.
The appeals court has ruled that a lower court ruling was “correct” in concluding that President Trump’s action likely violated the Constitution’s due process clause.
The ruling means that Lisa Cook can vote with the other members of the Federal Reserve’s board of governors on whether to lower interest rates.
Futures markets are pricing in a nearly 100% likelihood that the U.S. central bank announces a 25-basis point rate cut on Sept. 17.
