Judicial Block on Trump's Fed Governor Move Ignites Legal Clash

A federal judge has temporarily halted President Donald Trump's attempt to remove Federal Reserve Governor Lisa Cook over accusations of mortgage fraud, which she denies. The dispute raises critical questions about the Fed's independence and the legal grounds for removing a sitting governor.

A federal judge has intervened in a significant legal battle by temporarily blocking President Donald Trump's effort to remove Federal Reserve Governor Lisa Cook. The move marks an early stumbling block for the White House, potentially undermining the Federal Reserve's cherished independence.

Presiding U.S. District Judge Jia Cobb in Washington, D.C., issued a preliminary ruling that delves into whether allegations of mortgage fraud committed by Cook prior to her appointment provide legitimate grounds for her dismissal. The Trump administration, which initiated dismissal proceedings in August, faces resistance from the Fed, which cites her continued position.

The legal struggle, poised to escalate to the U.S. Supreme Court, has deeper implications for the Fed's rate-setting autonomy, a cornerstone for curbing inflation. This comes amid Trump's pressure on the central bank to aggressively cut rates, with Federal Reserve Chair Jerome Powell's policy leadership now under sharper scrutiny.

(With inputs from agencies.)