Judge delays decision on Trump’s move to fire Fed governor Lisa Cook. Here’s what’s next.

A lawyer for Federal Reserve governor Lisa Cook clashed with the Trump administration Friday in an emergency court hearing to decide if the governor may continue in her job.

US District Judge Jia Cobb, an appointee of former President Joe Biden, left that central question in the high-stakes hearing unanswered, leaving time for Cook’s legal team to file additional legal documents and confer with the administration on procedural next steps.

Cook’s lawyer, Abbe Lowell, is asking Judge Cobb to block President Trump from firing Cook and allow Cook to continue on the job — in other words, maintain the status quo. That includes participating in the Fed’s policy meetings, with its next two-day meeting set to kick off Sept. 16.

Justice Department attorney Yaakov Roth argued that the president should be permitted to fire Cook, alleging that before her confirmation as a Fed governor, Cook had made contradictory representations on mortgage applications.

Roth argued that after Cook’s confirmation, she made further contradictory representations about her real estate properties on documents submitted to the US government.

In June 2021, Cook purchased a home in Ann Arbor, Mich., using a mortgage application that designated the property as a primary residence. Cook purchased another property in Atlanta two weeks later, using a mortgage application designating that property as a primary residence. It was listed for rent the following year, in Sept. 2022.

US Federal Housing Authority Director William Pulte referred the allegations to US Attorney General Pam Bondi earlier this month. On Thursday, in a second criminal referral, Pulte alleged that Cook represented a condominium in Cambridge, Mass., as a second home, which was used instead as a rental investment.

At the heart of the hearing: arguments over what Congress meant in the Federal Reserve Act (FRA) when it said the president could remove Federal Reserve members “for cause.”

Cook’s lawyer argued that “cause” could not be defined without taking into account Trump’s intention in firing Cook, which he attributed to Cook’s decision not to acquiesce to the president’s preference for an interest rate reduction.

Allegations of fraud, Lowell said, were the president’s “weapon of choice” to remove board members and other officers serving the country.

The government’s lawyer, Roth, said that although the president may want to lower interest rates, the matter would amount to a policy issue, which does not qualify as “cause” under the FRA.