WASHINGTON

A US appeals court ruled Monday that President Donald Trump cannot fire Federal Reserve Governor Lisa Cook right before the central bank's policy meeting that will determine whether to cut interest rates.

The decision by the US Court of Appeals for the District of Columbia Circuit allows Cook to participate in the Fed's pivotal two-day policy meeting that begins Tuesday morning.

Trump announced on Aug. 25 that he fired Cook on the allegations of a mortgage fraud, the first Black woman to serve as a governor on the Federal Reserve Board. Cook immediately filed a lawsuit contesting the dismissal.

On Thursday, Trump administration filed an appeal requesting that the lower court's decision allowing Cook to remain at the Fed be suspended before the Fed meeting.

Bill Pulte, the director of the Federal Housing Finance Agency, accused Cook of mortgage fraud, which is why the president said he was taking the action in late August.

Cook denied any wrongdoing, while her lawyers contend that Trump is only using Pulte's allegations as a pretext, and that the president is using her potential removal as part of a campaign to persuade the Fed to lower interest rates.

The US president has also often criticized Fed Chair Jerome Powell for opposing rate cuts, and he even contemplated firing him at one time.

Despite retraction of his threats against Powell, Trump went ahead and attempted to fire Cook, a former Joe Biden appointee who has voted in tandem with Powell.

Of the Fed's seven governors, two have been chosen by Trump and are involved in interest rate-setting decisions. And on Monday, the US Senate confirmed the Stephen Miran, one of Trump’s top economic advisers, will serve on the Fed’s Board of Governors.

The central bank will announce its interest rate decision on Wednesday, which it is widely expected to cut the policy rate by 25 basis points, as the job market showed signs of weakening in the past few months. The federal funds rate currently stands in the range of 4.25% to 4.5%.