The Supreme Court has blocked President Donald Trump from firing Federal Reserve Board Governor Lisa Cook, delivering a significant setback to his efforts to influence the nation's central bank. The 5-4 ruling affirms the independence of the Federal Reserve, which is legally shielded from political pressure by allowing governors to be fired only for cause.
This decision marks the first time in the Federal Reserve's nearly 112-year history that a president has attempted to remove a sitting governor. The Trump administration had sought to dismiss Cook last August, following accusations of mortgage fraud made by his housing czar. Cook's legal team has characterized the allegations as an "unprecedented and illegal" attempt by the president to gain greater control over the Fed and pressure its members to lower benchmark interest rates. No charges have been brought against Cook.
During oral arguments earlier this year, Trump's legal team struggled to gain traction with the justices. The court appeared concerned about the abrupt nature of the dismissal attempt and the lack of due process for Cook. Justice Brett Kavanaugh questioned how an immediate firing without notice or recourse would impact judicial review and due process, stating it could "weaken, if not shatter, the independence of the Federal Reserve." Justice Samuel Alito noted the "very hurried manner" of the removal attempt and that the specific allegations against Cook had not been explored by any court.
The Supreme Court's decision to maintain Cook's position on the Fed board while the case was under review is noteworthy, as justices had recently sided with Trump on emergency stay requests in other cases concerning quasi-independent agencies.
Fed Governor Lisa Cook and then-Federal Reserve Chairman Jerome Powell were sworn into office separately but have worked together.
