The US Supreme Court on Wednesday, October 1, declined President Donald Trump's attempt to immediately remove Federal Reserve Governor Lisa Cook. Allowing her to remain in office for now, the court will next review the Trump administration's efforts to remove her at oral arguments in January 2026, The New York Times reported.
According to Reuters, this sets up a key legal battle over first of its first-of-its-kind bid by a US President to remove a Fed official, besides opposing the central bank's independence.
This comes after former Fed and Treasury officials, as well as Cook’s legal team, said that allowing Trump to fire the Federal Reserve Governor could lead to economic turmoil, since the litigation over her status was underway.
What to know?
Justices have refused to take an immediate decision on the US Justice Department's request to put an order on hold, which temporarily blocked Trump from firing Lisa Cook, who was appointed by former President Joe Biden during his tenure. A resolution regarding that request has been deferred till time all the arguments in the case are heard.
In 1913, when the Federal Reserve was created, Congress came up with the Federal Reserve Act, highlighting provisions that shielded it from political interference. It mentioned that governors could be fired by the US President only "for cause," but the term has not been defined further, while it does not even establish procedures for removal, according to Reuters.
{{/usCountry}}In 1913, when the Federal Reserve was created, Congress came up with the Federal Reserve Act, highlighting provisions that shielded it from political interference. It mentioned that governors could be fired by the US President only "for cause," but the term has not been defined further, while it does not even establish procedures for removal, according to Reuters.
{{/usCountry}}Last month, US District Judge Jia Cobb passed an order that the US President's claims regarding Cook's involvement in mortgage fraud before taking office failed to provide sufficient grounds for her removal from the post under the Federal Reserve Act.
Cook filed a case against Donald Trump in August. This came after he announced his plans to remove the first-ever Black woman to serve in the position. Trump is the first U.S. president to make efforts to remove a Federal Reserve Governor in the central bank's more than 100-year history.
Reaction from White House
According to Reuters, White House spokesperson Kush Desai said that Trump "lawfully" fired Cook from the post. "We look forward to ultimate victory after presenting our oral arguments before the Supreme Court in January," Desai added.
On the other hand, Cook's lawyers Abbe Lowell and Norm Eisen said the decision of the US Supreme Court "rightly" allows their client to continue.
In recent times, the Supreme Court has allowed the Trump administration to remove people from different federal agencies, which were established by Congress as independent from direct presidential control, according to the news agency.
FAQs
When was Lisa Cook appointed as Federal Reserve Governor?
She was nominated to the Fed in 2022.
Who appointed Lisa Cook?
Cook was nominated by former US President Joe Biden.
When will Supreme Court next hear the matter?
It will be heard in January.