The U.S. Supreme Court on Wednesday declined to let US President Donald Trump immediately fire Federal Reserve Board Governor Lisa Cook, instead scheduling oral arguments for January in what could become a defining battle over the Fed’s independence.
The brief unsigned order means Cook, a Democratic appointee reappointed by President Joe Biden in 2022 to a 14-year term, will remain on the board while the case unfolds. A ruling is expected before June, according to CBS.
Trump had asked the justices to allow her removal at once, citing “for cause” powers under the Federal Reserve Act. But the court’s refusal suggests there wasn’t enough support for such an extraordinary emergency move.
Why Lisa Cook is in the crosshairs
Cook, the first Black woman to serve as a Fed governor, has been accused by Trump of misrepresenting her primary residence on mortgage documents in 2021, before she joined the board. The president argued this amounted to mortgage fraud and gave him sufficient cause to oust her.
Cook has strongly denied the claims, calling them “flimsy” and “unproven.” Bank records reviewed by NBC News reportedly contradict the fraud allegation, showing she listed her Atlanta property as a vacation home. No charges have been filed.
According to a report by CBS, Cook’s lawyers told the court that accepting Trump’s reasoning would “eviscerate the Federal Reserve’s longstanding independence” and risk turning monetary policy into a tool of presidential politics.
A first in Fed history
No president has ever attempted to remove a sitting Federal Reserve governor in the central bank’s 112-year history. The Fed Act only allows removal “for cause,” generally understood to mean misconduct or incapacity during a governor’s term, not actions before joining the board.
In August, Trump announced Cook’s dismissal. She sued, arguing her removal violated federal law and her due process rights since she received no notice or hearing.
Last month, U.S. District Judge Jia Cobb sided with Cook, ruling Trump had likely violated the law and temporarily reinstating her. A divided appeals court upheld that decision, prompting Trump to take the fight to the Supreme Court.
High stakes for Fed independence
The clash goes beyond Cook’s personal case. It tests whether presidents can bend the central bank to their will by threatening the job security of its governors.
Cook’s lawyers warned that granting Trump’s request could “sound the death knell” for Fed independence, spook financial markets, and set a precedent for politically driven rate-setting.
The Fed’s seven-member board oversees monetary policy alongside regional Fed banks, with immense influence on interest rates, inflation, and the global economy. Cook participated in September’s rate-setting meeting, which resulted in the Fed’s first rate cut in nine months.
Trump’s broader push
Since returning to the White House in January, Trump has pressed for lower interest rates and railed against the Fed’s reluctance. He has also moved aggressively to fire Democratic-appointed officials across independent agencies, from the National Labor Relations Board to the FTC.
The Supreme Court is already preparing to hear another case this December that could overturn long-standing protections shielding FTC commissioners from political removal. A ruling against Cook could extend that logic to the Fed, a body the court itself recently described as “uniquely structured” and historically distinct.
Meanwhile, Trump ally Stephen Miran, confirmed by the Senate last month, has already joined the Fed board.
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