US judge blocks Trump from removing Fed Governor Cook, for now

Source: Reuters/Yahoo

(Reuters) -A federal judge on Tuesday temporarily blocked President Donald Trump from removing Federal Reserve Governor Lisa Cook, an early setback for the White House in an unprecedented legal battle that could upend the U.S. central bank's long-held independence.

The preliminary ruling by U.S. District Judge Jia Cobb in Washington, D.C., does not settle the key issue of whether the Trump administration's claims that Cook committed mortgage fraud before taking office, which she denies, are sufficient cause for her removal. Trump moved to fire Cook in late August, but the Fed has said she remains in her position.

The case, which will likely end up before the U.S. Supreme Court, has ramifications for the Fed's ability to set interest rate policy without regard to politicians' wishes, widely seen as critical to any central bank's ability to keep inflation under control.

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The law that created the Fed says governors may be removed only "for cause," but does not define the term nor establish procedures for removal. No president has ever removed a Fed governor, and the law has never been tested in court.


Read more: https://www.yahoo.com/news/articles/us-judge-blocks-trump-removing-015940893.html