The US Supreme Court has stopped President Donald Trump’s attempt to remove Federal Reserve Governor Lisa Cook. The court ruled 5-4 against the move. Judges said Cook did not receive enough “due process” to defend herself before the decision.
As a result, the case will return to lower courts. There, the Trump administration must prove its claims. Meanwhile, Cook will also have the chance to challenge the allegations.
The White House accused Cook of mortgage fraud. Officials claimed she listed two homes as her primary residence at the same time. That could allow lower mortgage interest rates. However, Cook denied the accusations. Supporters believe the claims are only an excuse.
They argue Trump wants greater control over the Federal Reserve. By law, a president can remove a Fed governor only “for cause.” That rule protects the central bank from political pressure.
During the January hearing, Cook’s lawyer, Paul Clement, criticised the process. He said the administration’s actions would make Congress’ protection for the Fed “kind of a joke.”
On the other hand, Solicitor General John Sauer defended the president’s decision. He argued Trump’s social media announcement gave Cook enough notice. Sauer also said the alleged misconduct, even if accidental, showed “negligence.” According to him, that could damage public trust in the Federal Reserve.
The ruling is widely seen as a victory for the Federal Reserve’s independence. It also highlights limits on presidential powers over the central bank. Even so, the legal battle is far from over.
Lower courts will now decide whether the administration has enough evidence. Their decision could shape how future presidents deal with Federal Reserve governors. For now, Lisa Cook remains in her position while the case continues.
