Supreme Court Allows Lisa Cook to Remain as Federal Reserve Governor
The U.S. Supreme Court has issued a temporary ruling permitting Lisa Cook to continue serving as a Federal Reserve governor, declining the Trump administration’s emergency request for her immediate removal from the central bank.
Legal Battle Over Fed Position
In a brief unsigned order, the nation’s highest court indicated it will hear arguments in January regarding President Donald Trump‘s attempt to remove Cook from the Federal Reserve Board. The court will consider whether to block a lower court ruling that favored Cook while her legal challenge to the firing continues.
This decision represents a notable departure from Trump’s typical success with emergency appeals before the Supreme Court. The ruling ensures Cook can participate in the remaining Federal Reserve meetings scheduled for 2025, including the crucial interest rate-setting committee meeting in late October.
Broader Implications for Federal Agencies
The Supreme Court is separately scheduled to hear arguments in December concerning Trump’s authority to dismiss members of boards overseeing other independent federal agencies. This parallel case could significantly impact Cook’s situation, particularly regarding whether federal judges can prevent such firings or are limited to ordering back pay for wrongfully dismissed officials.
Trump’s administration had sought to remove Cook before September’s Federal Reserve meeting, but a federal judge ruled the firing illegal. A divided appeals court subsequently rejected the administration’s emergency appeal, leading to the current Supreme Court involvement.
Unprecedented Presidential Action
The White House’s campaign to remove Cook marks an unprecedented effort to reshape the Federal Reserve Board, an institution traditionally designed to maintain independence from daily political pressures. No president in the Fed’s 112-year history has successfully fired a sitting Fed governor.
White House spokesman Kush Desai stated, “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.”
Legal Experts Note Distinct Treatment
Columbia Law School professor Lev Menand, author of a book on the Federal Reserve, observed that the court appears to be treating the Fed differently from other independent agencies. “The court seems to be steering a different course here,” Menand noted. “It has the effect of freezing the status quo that is in favor of Fed independence.”
This contrasts with the court’s handling of other cases involving presidential removals, including the upcoming December arguments concerning Rebecca Slaughter’s dismissal from the Federal Trade Commission.
Cook’s Response and Background
Cook, appointed to the Fed board by President Joe Biden, has maintained she will not leave her position and won’t be “bullied” by Trump. Her legal team issued a statement following the Supreme Court’s decision, saying it “rightly allows Governor Cook to continue in her role on the Federal Reserve Board, and we look forward to further proceedings consistent with the Court’s order.”
Meanwhile, Senate Republicans recently confirmed Stephen Miran, Trump’s nominee for an open Fed board position. Both Cook and Miran participated in last month’s meeting, with Miran casting the sole dissenting vote in favor of a larger interest rate cut.
Allegations and Counterarguments
The administration’s case against Cook centers on allegations of mortgage fraud, claiming she appeared to designate two properties in Michigan and Georgia as “primary residences” in mid-2021 before joining the Fed board. Such designations can potentially result in lower mortgage rates and reduced down payments compared to properties declared as rental units or secondary homes.
The White House contends that “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.”
As reported by EAM Vision Direct in their coverage of this developing story, the Supreme Court’s temporary ruling maintains the current balance of power at the Federal Reserve while setting the stage for a landmark constitutional decision regarding presidential authority over independent agencies.
