A federal judge today temporarily blocked United States President Donald Trump from removing Federal Reserve Governor Lisa Cook, an early victory in her push to remain on the central bank board while she challenges the President’s authority to dismiss her.

The case is drawing intense attention in Washington, with the Fed’s independence on the line.

Trump moved to fire Cook last month, citing allegations by a member of his Administration that she had committed mortgage fraud. No criminal charges have been filed, and Cook denies wrongdoing. She sued to stop Trump from ousting her.

The President is legally allowed to remove members of the Federal Reserve Board “for cause”, a phrase long understood to mean inefficiency, neglect of duty or malfeasance - but the specifics have never been tested in court.

Cook has shown strong evidence that her removal from the Fed board likely violated the law, Judge Jia Cobb wrote.

“At this preliminary stage, the Court finds that Cook has made a strong showing that her purported removal was done in violation of the Federal Reserve Act’s ‘for cause’ provision,” she wrote.

The Fed’s “for cause” standard for removal applies only to a governor’s conduct and performance while in office, not actions before taking the role, Cobb signalled. Trump has alleged that Cook engaged in mortgage fraud before joining the central bank.

The judge also said Cook’s removal likely violated Cook’s due process rights.

The Fed board will meet next week, and many analysts expect the central bank to cut interest rates - which Trump has been advocating publicly for months.

Today’s ruling means Cook will likely be able to participate in that meeting, though the Trump Administration is almost certain to appeal the decision.

The Trump Administration has accused Cook of making false statements on mortgage applications filed in 2021 in connection with a home in Michigan and a condominium in Georgia. The applications came before President Joe Biden nominated her to the Fed.

Cook has yet to respond specifically to the allegations, but her lawyers suggested in court papers that she may have “mislabelled” her homes and insisted she did not commit fraud.

The Justice Department has opened a criminal mortgage fraud investigation of her, a sharp escalation of the Trump Administration’s efforts to oust her from the board. Investigators in recent days have issued subpoenas as part of the inquiry.

Trump has made it clear he wants a central bank more responsive to his political agenda, pressing for steep rate cuts to ease the cost of financing swelling deficits and suggesting nominees viewed as loyalists.

Last month, he said he would soon hold a majority on the Fed’s seven-member board - a shift that could give him greater control over it and the power to name replacements for the 12 regional Fed bank presidents, who also help set policy.

He has also argued he had the authority to fire Cook “for cause”.

Cook argues her due process rights were violated because she was never given a chance to contest them before Trump sought to remove her.

“The grounds the President cited - evidence of deceitful and potentially criminal conduct - plainly constitute ‘cause’ under any standard,” Trump’s lawyers wrote in a court filing.

Cobb acknowledged at a two-hour hearing late last month that the issues were novel, marking the first time a president has sought to remove a sitting Fed governor.