Washington: A federal court has ruled that embattled Federal Reserve Governor Lisa Cook can remain in her position while she fights US President Donald Trump’s efforts to fire her.

The ruling, which will almost certainly be appealed, is a blow to the Trump administration’s efforts to assert more control over the traditionally independent Fed, which sets short-term interest rates to achieve its congressionally mandated goals of stable prices and maximum employment. Congress has also sought to insulate the Fed from day-to-day politics.

US District Judge Jia Cobb late on Tuesday granted Cook’s request for a preliminary injunction blocking her firing while the dispute makes its way through the courts. 

Cobb ruled Cook would likely prevail in the lawsuit she filed late last month to overturn her firing.

Cobb ruled the allegations likely weren’t sufficient legal cause to fire her. 

Under the law governing the Fed, governors can only be removed “for cause”, which Cobb said was limited to actions taken during a governor's time in office.

Economists worry if the Fed falls under the control of the White House, it will keep its key interest rate lower than justified by economic fundamentals to satisfy Trump’s demands for cheaper borrowing. That could accelerate inflation and could also push up longer-term interest rates, such as those on mortgages and car loans.