US Supreme Court rejects Trump’s unprecedented bid to fire Fed’s Cook

By Andrew Chung

WASHINGTON, June 29 (Reuters) – The U.S. Supreme Court on Monday did not allow Donald Trump to fire Federal Reserve Governor Lisa Cook as he stood firm to preserve the central bank’s cherished independence against an unprecedented challenge from the Republican president.

In a 5-4 decision, the court blocked Trump’s bid to become the first president to fire a Fed official since Congress created the central bank in 1913. In his second term as president, Trump has tested the limits of presidential power in many other ways.

Conservative Chief Justice John Roberts and fellow conservative Justice Brett Kavanaugh were in the majority, along with the court’s three liberal justices. ‌Conservative Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, and Amy Coney Barrett dissented.

Roberts, who wrote the decision, said Trump “failed to provide Cook with the procedural protections to which he was legally entitled. Without such protections, he could not properly challenge the president’s charges against him.”

Roberts added that Federal Reserve governors “do not serve at the pleasure of the president, but instead have staggered 14-year terms and can only be removed ‘for cause.'”

Last August, Trump cited unproven allegations of mortgage fraud in trying to oust Cook, the first Black woman to serve as Fed governor, while calling it an excuse to remove her over monetary policy differences.

The justices rejected Trump’s Justice Department request to vacate the judge’s order blocking Cook’s immediate dismissal while Cook’s legal challenge to the firing continues. Cook denied Trump’s claims.

In another decision Monday, the Supreme Court expanded its powers over the government by backing Trump’s firing of Democratic Federal Trade Commission member Rebecca Slaughter, overturning a 1935 precedent that recognizes Congress’s authority to protect leaders of certain regulatory agencies from removal at the will of the president.

Monday’s Cook decision follows the justices’ Feb. 20 decision in another case with major economic ramifications to strike down most of Trump’s sweeping global tariffs; This decision led to a harsh condemnation of the court by the president.

The Fed is the world’s most important central bank, an institution that sets the cost of credit for the United States and beyond and has been in Trump’s crosshairs since he returned to the presidency in January 2025.

Cook’s term would last until 2038. Cook was appointed in 2022 by Democratic former President Joe Biden.

Trump’s targeting of Cook and a separate criminal investigation that his administration launched in January but later launched against Fed Chairman Jerome Powell represented the biggest challenge to the central bank’s independence since its founding.

May 15 was the last day of Powell’s eight-year tenure as Fed chairman, but he remains a member of the Fed Board of Governors. The US Senate voted on May 13 to confirm Trump’s nominee, Kevin Warsh, as Powell’s successor, and Warsh was sworn in on May 22.

When the justices agreed to hear Cook’s case in October, they left him in office for now. The Supreme Court heard arguments in the case in January, with Cook and Powell also present.

FEDERAL RESERVE ACT

In creating the Fed in 1913, Congress passed a law called the Federal Reserve Act that included provisions to protect the central bank from political interference; this law required governors to be removed by a president only “for cause,” although the law did not define the term or establish procedures for removal.

While Monday’s decision doesn’t exactly define what “reason” might cause a president to fire Cook or other board members, Roberts said the central bank’s history and independence suggest that should be a “significant threshold.”

“Without such restrictions, any perceived or alleged misstep (past or present) could provide a ready pretext for impeaching a governor, a fact he is acutely aware of and will surely weigh on him as he decides what to say and how to vote,” Roberts said. he wrote. “Nothing could be more corrosive to the independence that Congress seeks to preserve.”

Short of impeachment, Roberts said only the president can decide whether to remove a Federal Reserve Board member, but that doesn’t mean he can make that decision for any reason or no reason.

“Congress, of course, could give the president the authority to remove Federal Reserve Governors at any time,” Roberts wrote. “Or Congress could exempt from judicial review the president’s removal of governors from the case. But Congress has done neither.”

Trump attempted to fire Cook on August 25, 2025, by posting a termination letter on social media citing allegations that Trump-appointed Federal Housing Finance Agency Director Bill Pulte disclosed regarding homes he owned in Ann Arbor, Michigan, and Atlanta.

“As I have said repeatedly, I believe Lisa Cook will be charged with mortgage fraud,” Pulte wrote on social media Monday.

U.S. District Judge Jia Cobb ruled in September that Trump’s attempt to remove Cook without notice or a hearing likely violated his right to a trial under the Fifth Amendment to the U.S. Constitution. The judge also said that because the allegations against Cook relate to conduct that occurred before he served in that position, there is likely not a legally sufficient basis to remove him from office under the Federal Reserve Act.

The U.S. Court of Appeals for the District of Columbia Circuit rejected Trump’s request to suspend Cobb’s order.

REQUESTS OF POLITICIANS

Trump has pressured the central bank to cut interest rates faster and deeper than it wants to do as it battles persistent inflation, and has repeatedly criticized Powell for not complying with his wishes.

The Cook case has implications for the Fed’s ability to set interest rates without regard to politicians’ wishes, which is seen as critical to any central bank’s ability to perform tasks such as keeping inflation in check.

As a Fed governor, Cook helps set U.S. monetary policy along with the rest of the central bank’s seven-member board and the presidents of the 12 regional Fed banks.

In previous cases, the Supreme Court has challenged the independence of various federal agencies from presidential control and may soon overrule a key precedent that has protected the heads of independent agencies from removal since 1935.

However, the court signaled last year that it might consider the central bank an exception, stating in its May 2025 decision that allowed Trump to dismiss two Democratic members of federal labor boards that the Fed has a unique structure and historical tradition.

PRESIDENTIAL POWER

Both Cook’s lawsuit and the fight over the tariffs involved the legal implications of Trump’s aggressive pushing of the limits of presidential power since returning to office in January 2025.

Trump also used his executive authority to quickly transform policies on immigration, military service, federal employment and other issues. To date, the Supreme Court has allowed most of these policies to continue despite legal challenges, but the tariff decision was a major exception.

In the tariff decision, the court rejected a signature piece of Trump’s economic agenda by invalidating tariffs Trump had imposed in 1977 on nearly every U.S. trading partner under a law intended for use in national emergencies; This is something no other president has done.

Trump reacted angrily to the ruling, saying he was “absolutely ashamed” of some of the justices and calling the court’s Republican-appointed nominees who ruled against him — including two of his own — “idiots” and “lapdogs” for Democrats.

As in other legal disputes, the administration has defended a broad view of Trump’s authority in Cook’s case, saying it is within his “unreviewable discretion” as long as he determines the reason for the president’s impeachment.

Cook’s lawyers argued that giving him this authority would eliminate the Fed’s independence, distort markets and provide a road map for future presidents to guide monetary policy.

POWELL INVESTIGATION

Like Cook, Powell characterized the administration’s action against him — an investigation involving cost overruns on the Fed’s project to renovate two historic buildings in downtown Washington — as a pretext aimed at gaining influence over monetary policy. On March 13, a judge blocked subpoenas sent by a Trump-appointed prosecutor in the Powell investigation, agreeing with Powell that the investigation was an improper attempt to scare the central bank into lowering interest rates. The prosecutor dropped the investigation on April 24.

Trump publicly called Powell “stupid,” a “big loser” and “very incompetent.”

Trump in January nominated Warsh, who previously served on the Federal Reserve Board and whose father-in-law is wealthy Trump supporter Ron Lauder. Supreme Court Justice Clarence Thomas administered Warsh’s oath of office during the swearing-in ceremony, and fellow conservative Justice Brett Kavanaugh was also in attendance.

The Justice Department dropped its investigation into Powell after Republican Senator Thom Tillis called the investigation a senseless attack on the Fed’s independence and promised to block Warsh’s confirmation until the investigation was concluded.

Pulte last year asked the Justice Department to launch a criminal investigation into Cook and others for alleged mortgage fraud. There is no indication that such a criminal investigation will move forward.

While Pulte was making the accusations, Reuters found that his father and stepmother were declaring the same status as Cook at two homes in two different states. These “homestead exemptions” for residences are intended to provide homeowners with a reduction in taxes for properties they use as their primary residence. The property tax office in Ann Arbor told Reuters that Cook did not violate tax abatement rules on his home, despite Pulte’s claims.

(Reporting by Andrew Chung; Editing by Will Dunham)