Less than two months after the Supreme Court ruled against an attempt by former President Donald Trump to remove a Federal Reserve Board of Governors member, Trump has initiated a new effort to dismiss the same official. Earlier this month, Trump sent a letter to Lisa Cook, a governor appointed by President Joe Biden, demanding a response to allegations of mortgage fraud.
This action is seen as a precursor to another attempt to remove Cook from the Federal Reserve's board, which would likely necessitate further court involvement. Cook has until Wednesday to respond to the allegations.
The current situation stems from a previous legal challenge in which Trump sought to fire Cook. The Supreme Court's decision in that case, Trump v. Cook (2026), has been described as unclear, leading to confusion about the extent of a president's authority to dismiss Federal Reserve officials.
The court's ruling came on the same morning as Trump v. Slaughter (2026), a case that appeared to affirm the president's broad power to fire leaders of federal agencies. However, the Cook decision did not cite Slaughter and offered no clear explanation for differentiating the Federal Reserve from other agencies.
At the core of the dispute is the concept of the "unitary executive," a theory favored by the Court's Republican majority. This theory posits that the president must have complete control over federal agencies, including the power to remove their leaders at will. Agencies that operate with a degree of independence from the president, such as the Federal Reserve, are viewed as potentially unconstitutional under this doctrine.
The Cook decision suggests a possible exception for the Federal Reserve, but the reasoning behind it remains unclear. Justice Clarence Thomas, in a dissenting opinion, argued that the Federal Reserve's functions, which include administering federal statutes and setting interest rates, fall under the purview of executive power, making its leaders fireable by the president.
Chief Justice John Roberts, writing for the majority in Cook, did not definitively rule on Trump's ability to fire Cook. Instead, the opinion stated that Cook was entitled to notice and an opportunity to respond to the allegations before termination. The court indicated that subsequent litigation would be necessary to assess the validity of any charges.
Trump's recent letter to Cook appears to comply with this requirement. Following Cook's response, if it is deemed insufficient, Trump is expected to proceed with an attempt to remove her, leading to further legal proceedings where a lower court will need to evaluate the allegations.
Preliminary examinations of the documents cited in the allegations suggest that Cook may not have committed fraud. Reports indicate that Cook disclosed to her lender that one of the properties in question would be used as a vacation home, contradicting the claim of dual principal residences. The effectiveness of this explanation in preventing her removal remains to be seen.
There are significant policy arguments for maintaining the Federal Reserve's independence. Allowing presidents to dismiss Fed leaders could lead to decisions influenced by electoral cycles rather than economic stability, potentially causing short-term boosts at the expense of long-term economic turmoil and inflation. However, the legal basis for such independence, particularly in light of the unitary executive theory, remains contested.
The ongoing ambiguity surrounding the president's power to remove Federal Reserve officials raises questions about who ultimately controls monetary policy and whether such actions could benefit a president at the potential expense of the U.S. economy.