WASHINGTON – A judge kept Lisa Cook on the Federal Reserve board as she fights President Donald Trump's unprecedented attempt to remove her from the central bank but the Justice Department quickly said it would appeal the decision.

U.S. District Judge Jia Cobb ordered Sept. 9 that Cook temporarily remain in place while she fights her firing in federal court. Cook's lawyer, Abbe Lowell, said the decision confirmed the central bank's independence.

“Allowing the president to unlawfully remove Governor Cook on unsubstantiated and vague allegations would endanger the stability of our financial system and undermine the rule of law,” Lowell said in a statement.

But the Justice Department said Sept. 10 it would appeal to the D.C. Circuit Court of Appeals. The case could eventually reach the Supreme Court to better define how a president could remove any of the seven Fed governors.

Trump has argued he fired Cook in August for alleged mortgage fraud before she began her 14-year term in 2023. Cook denies wrongdoing and continues to serve on the board while the litigation continues.

Cobb said Cook would be harmed significantly if she were removed from office while the case is argued. Cobb noted that, according to Congress, a president could only remove a Fed governor "for cause," which means a good reason.

"'For cause' thus does not contemplate removing an individual purely for conduct that occurred before they began in office," Cobb wrote.

Trump didn’t respond to a reporter’s question Sept. 9 about the case. No president has ever tried to fire a Fed governor since Congress created the board in 1913.

The high court has refused to prevent Trump from firing the heads of other so-called independent boards. But the justices seemed to draw a line at the seven-member Fed board, which the court said was “uniquely structured," with Congress intending that “monetary policy was independent of the president.”

Cook hasn’t been charged with a crime and hasn’t had a chance to formally respond to Trump’s allegations that she declared on mortgage forms that homes in Michigan and Georgia are her “primary residence.”

The Justice Department is investigating.

Paul Schiff Berman, a law professor at George Washington University who is an expert on the Constitution and administrative law, said the case could determine how much protection the “cause” requirement provides.

“The question becomes: will the Supreme Court allow Trump to do this end-run around the very ‘for cause’ removal protections that the court said was essential for central banking,” Berman said. “We’ll see. But this is a major escalation and it has dire consequences for our entire central banking system and therefore our entire economy.”

The Fed sets interest rates that help determine how fast or slow the economy grows. Trump has berated Fed Chairman Jerome Powell to lower interest rates to spur growth.

But Congress set up the seven-member Fed board to make its economic decisions independent of political pressure. The board meets next on Sept. 16 and 17, and is expected to cut interest rates to some degree.

The Consumer Price Index increased 0.2% in July, for a 2.7% rate over the previous year, according to the Labor Department's Bureau of Labor Statistics. The unemployment rate remained nearly unchanged at 4.3% in August, the bureau said.

The Producer Price Index dipped 0.1%, the Bureau of Labor Statistics announced Sept. 10. Trump greeted the lack of inflation by urging the Fed again for an interest rate cut.

“Just out: No Inflation!!!” Trump said on social media. “Powell is a total disaster, who doesn’t have a clue!!!”

The Senate Banking Committee voted along party lines Sept. 10 to recommend confirmation of Stephen Miran, a top White House economic adviser, to the Fed. Lawmakers said it wasn’t clear whether he could be confirmed before the next Fed meeting.

Trump had said at a Cabinet meeting Aug. 26 that he expected to soon have a majority on the Fed board to lower interest rates and boost housing.

“We’ll have a majority very shortly,” Trump said. "People are paying too high an interest rate. That's the only problem with housing. We have to get the rates down a little bit."

This article originally appeared on USA TODAY: Judge keeps Lisa Cook at Fed while Trump appeals and urges lower interest

Reporting by Bart Jansen, USA TODAY / USA TODAY

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