The US Supreme Court has blocked President Donald Trump’s attempt to immediately fire Federal Reserve Governor Lisa Cook, allowing her to remain in office until the case is heard in January 2026.
The court’s decision effectively deferred the request for her removal “pending oral argument”. This move is seen as a rare instance of pushback by the conservative-dominated court, which has been deferential to the current administration.
The Supreme Court’s decision has significant implications for the Federal Reserve’s autonomy and the balance of power within the US government. Cook was nominated to the Fed’s governing board by former President Joe Biden and has been a key figure in setting US interest rates. Trump attempted to fire Cook, citing allegations of mortgage fraud before taking office, which Cook denies.
A federal judge temporarily blocked Trump’s attempt to fire Cook, ruling that the allegations against her likely didn’t meet the “for cause” standard required under the Federal Reserve Act. “The best reading of the ‘for cause’ provision is that the bases for removal of a member of the Board of Governors are limited to grounds concerning a Governor’s behavior in office and whether they have been faithfully and effectively executing their statutory duties,” District Judge Jia Cobb wrote in the preliminary ruling.
The court’s decision to hear arguments in January will determine the limits of presidential authority over independent agencies and could have far-reaching implications for the Federal Reserve’s autonomy. Nearly 600 economists signed a letter expressing support for Cook and central bank autonomy, while a group of 18 former US Federal Reserve officials, Treasury secretaries, and top economic officials urged the Supreme Court not to let Trump fire Cook.
Cook’s lawyers argued that Trump’s attempt to fire her would destroy the central bank’s independence and disrupt financial markets. “This ruling recognises and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference,” Cook’s counsel Abbe David Lowell said in a statement.
The case highlights the ongoing tensions between the Trump administration and the Federal Reserve, with Trump repeatedly criticizing the Fed’s leadership and calling for lower interest rates. The Supreme Court’s decision will have significant implications for the future of the Federal Reserve and the US economy.
