TLDR
- Trump’s administration seeks Supreme Court’s help in firing Fed Governor Cook.
- The dispute over Cook’s removal centers on mortgage fraud allegations.
- The D.C.Circuit Court rejected Trump’s request to pause the ruling.
- The Federal Reserve cut interest rates for the first time in 2025.
Former President Donald Trump has asked the U.S. Supreme Court to intervene in a legal dispute over the removal of Lisa Cook, a member of the Federal Reserve’s Board of Governors. This follows a recent federal court ruling that allowed Cook to remain in office despite Trump’s attempt to fire her. The administration argues that the decision undermines the president’s authority to remove Federal Reserve members for cause.
Trump Seeks Supreme Court Intervention in Fed Governor Removal Case
The conflict started when Trump attempted to remove Cook after allegations of mortgage fraud. According to the administration, Cook falsely claimed two properties as her primary residence, violating financial rules.
The President argued that these actions warranted her removal from the Federal Reserve Board under the “for cause” provision in the Federal Reserve Act, which permits the president to dismiss members for certain reasons.
However, Cook challenged her dismissal in federal court, claiming that the allegations did not meet the legal threshold for removal. On September 9, U.S. District Judge Jia Cobb ruled that Cook could stay on the board while the case continued.
Judge Cobb found that Cook was likely to succeed in her argument that the President’s actions violated the Federal Reserve Act. The court also raised concerns about the due process protections that Cook should have received before being fired.
Legal Battle Over Lisa Cook’s Dismissal Heats Up
Following Cobb’s ruling, the Trump administration sought a stay on the decision, asking the U.S. Court of Appeals for the District of Columbia Circuit to halt it. The appeals court, however, rejected the request to temporarily block the ruling by a 2-1 vote. Judges Bradley Garcia and J. Michelle Childs agreed that Cook was likely to prevail on her due process claim. They noted that the administration’s argument did not sufficiently address the constitutional protections Cook was entitled to before her removal.
Judge Gregory Katsas, who dissented, argued that the President should have the authority to remove Federal Reserve governors if there is a valid cause. He also disagreed with the majority’s interpretation of due process rights for high-ranking officials. Despite the split opinion, the appeals court left the decision in place, allowing Cook to remain on the Federal Reserve Board.
Trump’s Legal Strategy Moving Forward
The Trump administration, unsatisfied with the appeals court’s decision, has now petitioned the U.S. Supreme Court for an emergency order. Solicitor General D. John Sauer, representing the government, argued that the removal of a Federal Reserve governor falls within the President’s constitutional authority. In his petition, Sauer emphasized that the “for cause” clause does not limit the reasons for removal to actions taken while serving on the board, asserting that past misconduct can be grounds for dismissal.
Sauer also contended that the lower courts had overstepped their authority by ruling against the President’s decision, and he requested an administrative stay to pause the lower court’s ruling while the Supreme Court considers the case. The justices have not yet decided whether they will take up the case or grant the emergency stay.
Trump’s Legal Strategy and the Future of Fed Board Autonomy
Trump’s move to remove Cook comes amidst broader tensions over the direction of U.S. monetary policy. Cook participated in the Federal Open Market Committee’s (FOMC) meeting in September, where the Fed voted to lower interest rates by 0.25%. While this rate cut marked the first such decrease in 2025, Trump has criticized the Federal Reserve, especially its Chairman Jerome Powell, for not implementing more aggressive cuts.
The case also fits into Trump’s broader strategy to reshape the Federal Reserve’s composition. He has expressed frustration with the central bank’s stance on interest rates, and Cook’s removal attempt is seen by some as part of his effort to place governors more aligned with his economic views. This includes Trump’s nomination of Stephen Miran to the Fed Board, who voted for a larger rate cut at the September FOMC meeting.
As this case progresses, the outcome could shape the future of presidential power over independent agencies and the Federal Reserve’s autonomy. The Supreme Court’s decision, if it takes up the case, may provide clarity on the limits of presidential authority in these matters.
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