Supreme Court says Fed governor Cook can remain in job pending arguments
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Fed governor LIsa Cook. Photo by SAUL LOEB/AFP via Getty Images
Federal Reserve governor Lisa Cook can remain in her job at least through January as the Supreme Court hears a case over whether President Trump can fire her, the court said Wednesday.
Why it matters: It is a win for Cook and advocates of central bank independence, who believe that if she was temporarily removed without the matter being litigated, it would open the door for a president to fire any Fed governor for dubious cause.
- The Trump administration had asked for a stay of an appeals court ruling that Cook could remain in place, which was not granted.
- That means Cook will be allowed to participate in the remaining two Fed policy meetings of the year — and that Trump does not have a vacancy with which to appoint a new governor until at least early 2026.
Driving the news: "The application for stay presented to The Chief Justice and by him referred to the Court is deferred pending oral argument in January 2026," per the court's web site.
State of play: Trump said he was firing Cook for cause over alleged mortgage irregularities — applications for two separate home loans each describing the purchase as for a primary residence. The accusations have not been adjudicated in court.
- The Federal Reserve Act says the president can fire a Fed governor for cause, but does not specify what constitutes cause or who gets to decide whether that standard is met.
- Economists of both parties have argued that if the president can unilaterally decide what constitutes cause, it would amount to the end of the Fed's statutory independence, which is meant to insulate the central bank from day-to-day political considerations.
What they're saying: "Granting the government's request to remove Governor Cook from the Board immediately would upset these longstanding protections and the essential functions they serve," wrote a star-studded list of former policymakers in a friend of the court brief.
- "Doing so would expose the Federal Reserve to political influences, thereby eroding public confidence in the Fed's independence and jeopardizing the credibility and efficacy of U.S. monetary policy," wrote the officials, who include all three living former Fed chairs.
- "Maintaining the status quo while the lawfulness of the termination is adjudicated, in contrast, would serve the public's interest by safeguarding the independence and stability of the system that governs monetary
policy in this country," they added.
For the record: "President Trump lawfully removed Lisa Cook for cause from the Federal Reserve Board of Governors. We look forward to ultimate victory after presenting our oral arguments before the Supreme Court in January," White House spokesman Kush Desai said in a statement.
Editor's note: This story has been updated with new details throughout.
