The Supreme Court on Monday blocked President Donald Trump's attempt to remove Federal Reserve Board Governor Lisa Cook, delivering a significant setback to the president's efforts to influence the nation's central bank.
The 5-4 ruling saw conservative Justices John Roberts and Brett Kavanaugh join liberal Justices Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson in opposing the president's action. Trump had sought to fire Cook, a move that would have made him the first president in the Federal Reserve's nearly 112-year history to dismiss a sitting governor.
Federal Reserve officials are legally protected from termination without cause, a measure designed to insulate the institution from political pressure. Trump's administration had attempted to remove Cook in August, citing accusations of mortgage fraud made by his housing czar. However, no charges have been filed against Cook, and her legal team described the allegations as an "unprecedented and illegal" effort to gain greater control over the Federal Reserve and compel it to lower interest rates.
During oral arguments earlier this year, the Trump administration's top lawyer, John Sauer, faced skepticism from the justices. Several justices questioned the administration's basis for abruptly removing Cook without notice or an opportunity for her to contest the decision.
Justice Brett Kavanaugh expressed concern that allowing such a removal would undermine the Fed's independence, stating that it would leave "no room for judicial review, due process, or remedy" should Cook wish to challenge her dismissal. Justice Samuel Alito noted the "very hurried manner" of the removal attempt and highlighted that the alleged facts against Cook had not been fully examined by any court.
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The Supreme Court's decision to allow Cook to remain on the board while the case was under review marked a departure from recent trends, where the court had frequently sided with Trump on emergency stay requests concerning other independent agencies.
Cook, who was sworn into her role in 2022, has been a member of the Federal Reserve's Board of Governors. The board plays a crucial role in setting monetary policy for the United States.
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