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“Trump cannot, for now", the US Supreme Court on Wednesday refused to let President Donald Trump remove Lisa Cook from the Federal Reserve Board, preserving the central bank’s independence while the legal battle continues.
Trump had asked the high court to immediately stay a lower-court ruling that blocked him from firing Cook, the first Black woman to serve as a Fed governor, appointed by his Democratic predecessor. Instead, the justices said they would hear oral arguments in January to resolve the dispute.
In a brief, unsigned order, the court confirmed it will consider whether the lower court acted appropriately in blocking Cook’s removal while her challenge moves forward. The decision marks a rare instance where Trump did not secure swift relief from the Supreme Court in an emergency appeal.
The case is part of a broader debate over the president’s authority to remove officials from independent federal agencies. Related arguments are scheduled for December, focusing on whether Trump can dismiss board members at will. A critical issue in both disputes is whether federal judges can prevent firings or are limited to awarding back pay to improperly removed officials.
The January hearings will determine the limits of presidential authority over independent agencies and could have far-reaching implications for the Federal Reserve’s autonomy and the balance of power within the U.S. government.
Impact Shorts
More ShortsTrump had sought to oust Cook before the September meeting of the Fed’s interest rate-setting committee. But a judge ruled that the firing was illegal, and a divided appeals court rejected the Trumps administration’s emergency appeal.
A day after the meeting concluded with a one-quarter of a percentage point reduction in a key interest rate, the administration turned to the Supreme Court in a new emergency appeal.
The White House campaign to unseat Cook marks an unprecedented bid to reshape the Fed board, which was designed to be largely independent from day-to-day politics. No president has fired a sitting Fed governor in the Fed’s 112-year history.
Cook, who was appointed to the Fed board by Democratic President Joe Biden, has said she will not leave her job and won’t be “bullied” by Trump. One of her lawyers, Abbe Lowell, has said she “will continue to carry out her sworn duties as a Senate-confirmed Board Governor.”
Separately, Senate Republicans recently confirmed Stephen Miran, Trump’s nominee to an open spot on the Fed’s board. Both Cook and Miran took part in the Fed’s recent meeting. Miran was the sole dissenting vote, preferring a larger cut.
The next opportunity for Cook to cast a vote will be at the meeting of the Fed’s interest rate setting committee, scheduled for Oct. 28-29.
Trump has accused Cook of mortgage fraud because she appeared to claim two properties, in Michigan and Georgia, as “primary residences” in June and July 2021, before she joined the Fed board. Such claims can lead to a lower mortgage rate and smaller down payment than if one of them was declared as a rental property or second home.
“Put simply, the President may reasonably determine that interest rates paid by the American people should not be set by a Governor who appears to have lied about facts material to the interest rates she secured for herself — and refuses to explain the apparent misrepresentations,” Solicitor General D. John Sauer wrote in his Supreme Court filing.
Cook has denied any wrongdoing and has not been charged with a crime. According to documents obtained by The Associated Press, Cook specified that her Atlanta condo would be a “vacation home,” according to a loan estimate she obtained in May 2021. In a form seeking a security clearance, she described it as a “2nd home.” Both documents appear to undercut the administration’s claims of fraud.
U.S. District Judge Jia Cobb ruled that the administration had not satisfied a legal requirement that Fed governors can only be fired “for cause,” which she said was limited to misconduct while in office. Cook joined the Fed’s board in 2022.
Cobb also held that Trump’s firing would have deprived Cook of her due process, or legal right, to contest the firing.
By a 2-1 vote, a panel of the federal appeals court in Washington rejected the administration’s request to let Cook’s firing proceed.
Trump’s lawyers have argued that even if the conduct occurred before her time as governor, her alleged action “indisputably calls into question Cook’s trustworthiness and whether she can be a responsible steward of the interest rates and economy.”
With inputs from agencies