Supreme Court allows Lisa Cook to remain on Fed board for now
The Supreme Court on Wednesday ruled that Federal Reserve governor Lisa Cook can remain in her job for now and announced it will take up a high-stakes case over President Donald Trump’s attempt to remove her from the central bank.
The court will hear arguments in the case in January, and its temporary ruling will last at least until then. Lower courts allowed Cook to keep her position. The Trump administration had asked the high court to overturn those decisions and allow Trump to remove Cook immediately.
The high court’s decision to hear the case sets up a showdown over the independence of the central bank, which sets interest rates and is tasked with taming inflation. The case could have major ramifications for businesses and consumers.
The provisional ruling to allow Cook to keep her job signals hesitation from at least some of the justices regarding the president’s aggressive campaign to oust Cook and gain tighter control over the Fed. Her removal would have required affirmative votes from at least five of the nine justices.
Columbia law professor Lev Menand called the court’s move “quite consequential,” even though the justices offered no detailed reasoning to explain their two-sentence order. By delaying a ruling on the administration’s request, the justices handed Cook a win.
“It’s not a definitive victory,” he said. “It just buys Lisa Cook a significant amount of additional time in office, contrary to the president’s wishes to displace her.”
Menand joined other academics in a friend-of-the-court brief supporting Cook, arguing that allowing the president to immediately dismiss the Fed governor could undermine central bank independence.
The ruling contrasted with others this year by the Supreme Court. In a string of victories for the administration, the conservative supermajority has allowed Trump to fire - at least temporarily - board members at a handful of agencies Congress set up to have some independence from the president, including the Federal Trade Commission and the National Labor Relations Board.
But the court also signaled in one of those rulings that it considers the Fed fundamentally different from other agencies and that the president might have less latitude to remove its governors.
A high-profile group of former treasury secretaries, Federal Reserve Board chairs and governors, and other high-level economic officials warned in a friend-of-the-court brief that removing Cook could jeopardize “the credibility and efficacy of U.S. monetary policy.”
The White House offered a low-key response to the setback from the court. “We have respect for the Supreme Court,” press secretary Karoline Leavitt said. “They’re going to hear the actual case and make a determination on the legal argument in January. And we look forward to that, because we maintain that she was fired well within the president’s legal authority to do so,” she added.
The decision to defer consideration of Cook’s case until January means she will be able to participate in at least the two remaining Fed meetings this year - one later this month, the other in December - where officials will consider whether to continue cutting interest rates. The Fed’s first scheduled policy meeting of 2026 is in late January.
Depending on how quickly the justices rule on the case, Trump might also lose an early opportunity to substantially reshape the Fed.
The presidents of the 12 regional Fed banks are due for reappointment in February. If Trump has control of a majority of the seven-member Fed board at that point, he could decide to replace some or all of those officials, who also weigh in on monetary policy. Currently, three of the Fed’s seven governors are seen as generally aligned with Trump.
Trump has accused Cook of mortgage fraud—a charge she denies—and has been trying to fire her since August. Cook has not been charged with a crime, and documents recently obtained by The Washington Post appear to contradict some of the claims leveled by the administration. She sued to remain on the job.
Solicitor General D. John Sauer wrote in filings with the court that Trump has reason to fire Cook “for cause,” as the law governing the Fed requires. He also said the courts don’t have the discretion to review the president’s determination that proper cause exists.
“The President’s strong concerns about the appearance of mortgage fraud, based on facially contradictory representations made to obtain mortgages by someone whose job is to set interest rates that affect Americans’ mortgages, satisfies any conception of cause,” Sauer wrote.
Cook’s attorneys warned in a filing that Cook’s immediate removal “would subvert the Federal Reserve’s historical independence and disrupt the American economy.”
Congress designed the Fed to have political distance from the president so it could make tough but unpopular decisions such as raising interest rates. Economists and many business leaders worry about presidents exerting pressure on the Fed to keep interest rates low for political reasons, which could spark long-term inflation.
Trump has complained loudly that the Fed should lower interest rates to stimulate the economy and had previously considered firing Fed Chair Jerome H. Powell. At the Fed’s meeting in September, the central bank cut interest rates by a quarter point amid signs of a softening labor market. Cook voted to lower the rate.
The Trump administration tried to oust Cook ahead of that meeting, but the last-minute play failed after a federal judge and an appeals court ruled against the administration.
“The government does not dispute that it failed to provide Cook even minimal process—that is, notice of the allegation against her and a meaningful opportunity to respond—before she was purportedly removed,” the appeals court majority wrote in the 2-1 ruling.
In a separate case, the Supreme Court will also weigh in December whether to overturn a 90-year-old precedent, known as Humphrey’s Executor, that allows Congress to create independent, nonpartisan agencies insulated from political interference by the executive.
The court is also set to decide during this term another major case dealing with the president’s authority over economic policy. The justices will determine whether most of Trump’s sweeping tariffs are legal.
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