🔗 Share this article US Court Prevents Trump from Dismissing Fed Governor Cook Fed Governor Cook took legal action against Donald Trump over efforts to remove her role A US appeals court has determined that US President Donald Trump may not dismiss Federal Reserve governor Lisa Cook from her role. The 2-1 ruling on Monday is a setback to Trump, as it ensures Cook can remain in office for the key Fed gathering on Tuesday and Wednesday, where officials are expected to cut US borrowing costs. Trump announced in August that he was dismissing Cook, claiming she had engaged in financial misconduct. Cook denied the allegations and stated that the president had no power to remove her. This case has major implications for the Fed's ability to set monetary policy without political influence from elected officials. Cook is part of the board responsible for setting monetary policy in the US. When US lawmakers created the Fed in 1913, it included provisions to maintain its independence from politics. No US leader has previously dismissed a Fed governor. The statutes cited by Trump to justify his effort to remove Cook had never been tested in court. The Trump administration is expected to appeal Monday's decision to the Supreme Court. Under the legislation that created the Fed, its board members may only be dismissed by a president for cause, though the law does not clarify the term nor establish procedures for removal. Cook, a Biden appointee and the pioneering African American woman to serve as a Fed board member, filed a lawsuit against Trump in August, claiming she was being targeted due to her monetary policy stance. The Fed has not cut interest rates so far this year as it aims to manage inflation, which have been fueled in part by the effects of Trump's tariffs on foreign products. Trump has consistently demanded significant rate cuts and has criticized Fed Chair Jerome Powell over his handling of interest rates. A rate cut is expected this week, though, in an effort to stimulate a sluggish US labour market. On Monday, Trump reiterated his demand for a large interest rate cut, writing on his Truth Social platform that Fed Chair Jerome Powell "needs to cut interest rates, now, and bigger than he had in mind."