The US Supreme Court has blocked Trump’s bid to oust Federal Reserve Governor Lisa Cook | Today’s news
The U.S. Supreme Court on Monday issued a landmark ruling on the Federal Reserve’s independence, rejecting President Donald Trump’s attempt to remove Federal Reserve Governor Lisa Cook from office.
In a 5-4 decision, the court refused to overturn a lower court order preventing Trump from firing Lisa Cook while her legal challenge continues. The decision means Cook will remain a member of the Federal Reserve Board of Governors.
How did the Supreme Court decide?
The Supreme Court rejected a request by Trump’s Justice Department to immediately remove Cook from the Federal Reserve Board.
The decision does not resolve the underlying lawsuit, but allows a lower court order protecting Cook’s position to remain in place while the case continues.
If Trump wins, he would become the first US president to fire a Federal Reserve governor since the central bank was established in 1913 by Congress.
Why did Trump try to remove Lisa Cook?
In August 2025, Trump attempted to fire Cook, citing mortgage fraud allegations involving homes she owned in Michigan and Georgia.
The allegations were made by Federal Housing Finance Agency Director Bill Pulte, a Trump appointee.
Cook denied any wrongdoing and claimed the allegations were merely a pretext to remove her due to disagreements over monetary policy.
Why did the lower courts block this move?
U.S. District Judge Jia Cobb ruled that Trump’s attempt to fire Cook likely violated her constitutional right to due process because she was not given notice or an opportunity to respond.
The judge also found that the allegations cited by Trump likely did not meet the “for cause” requirement under the Federal Reserve Act because they related to events before Cook joined the Fed.
The U.S. Court of Appeals later refused to stay the decision, prompting the administration to appeal to the Supreme Court.
What does the Federal Reserve Act say?
Congress created the Federal Reserve System through the Federal Reserve Act of 1913 to protect the central bank from political pressure.
By law, the president can only remove Federal Reserve governors “for cause.”
However, the law does not define what qualifies as “cause,” making Cook’s case an important legal test of presidential power.
Why is the judgment significant?
The decision is widely seen as a victory for the Federal Reserve’s independence.
The Fed sets US monetary policy, including interest rates, without direct political control. Economists generally argue that an independent central bank is necessary to control inflation and maintain confidence in the financial market.
Cook’s lawyers warned that allowing presidents to fire governors over political disagreements would undermine the Fed’s credibility and give future administrations more influence over monetary policy.
Trump’s clash with the Fed
Since returning to office in January 2025, Trump has repeatedly criticized the Federal Reserve for not cutting interest rates aggressively enough.
His administration also launched a criminal investigation into then-Fed Chairman Jerome Powell over the cost of renovations at the Fed’s Washington headquarters.
Powell called the investigation an attempt to pressure the central bank. A federal judge blocked subpoenas issued as part of the investigation, and the Justice Department later dropped the investigation.
Trump has publicly criticized Powell, calling him a “failure in chief,” “very incompetent” and “dull-headed.”
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