Supreme Court rules Trump cannot fire Fed Governor Lisa Cook for now

The Supreme Court ruled Monday that President Donald Trump does not have the authority to fire Federal Reserve Governor Lisa Cook from the central bank for now.

The court did not rule on whether Trump would have the authority to fire Cook or any other Fed member.

Instead, he rejected Trump’s bid to stay a lower federal court order blocking his termination because of his lawsuit challenging his termination benefits.

The decision comes nearly nine months after Trump said he fired Cook because a Trump-appointed official accused him of committing mortgage fraud before he became Fed governor.

But he has remained on the Fed Board ever since after a federal district court judge and then the Supreme Court blocked his removal, pending the outcome of his lawsuit challenging Trump’s action.

Although Trump claimed he wanted to oust Cook over alleged mortgage fraud, Cook and others believed he was motivated by Trump’s refusal to vote for the interest rate cuts the President had requested from the Fed during the first nine months of his second term in the White House.

Under the Federal Reserve Act, a president can remove a Fed governor only “for cause.”

The Supreme Court heard oral arguments in Cook’s case on January 21. During that day’s hearing, several judges expressed skepticism about claims by a Justice Department lawyer that Trump had legal grounds to fire him.

Justice Brett Kavanaugh said attorney General D. John Sauer’s argument that a president could remove any Fed governor for cause without subjecting that decision to review by a judge would “undermine, if not shatter, the independence of the Federal Reserve.”

Cook became the first black woman to serve as Fed governor. An appointee of former President Joe Biden, he denied allegations of mortgage fraud made by FHFA Director Bill Pulte last summer.

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