Legal Battle Over Fed Governor's Removal Tests Central Bank's Independence

A federal judge has temporarily halted President Donald Trump's efforts to remove Federal Reserve Governor Lisa Cook, marking an initial setback for the White House in what could become a landmark legal case challenging the independence of the U.S. central bank.

Judge Jia Cobb's preliminary ruling did not address the key concern over Trump's claims that Cook committed mortgage fraud prior to her appointment, which she vehemently denies. The case could eventually reach the U.S. Supreme Court, potentially impacting the Federal Reserve's capacity to set interest rates free of political interference.

The legal proceedings come amid Trump's calls for immediate cuts to interest rates, criticizing Fed Chair Jerome Powell's monetary policy leadership. The situation underscores the legal ambiguities surrounding the removal of Fed governors, as existing laws are vague on the definition and process for removal.