Supreme Court rules Trump cannot fire Fed Governor Lisa Cook for now

The Supreme Court ruled Monday that President Donald Trump does not have the authority to fire Federal Reserve Governor Lisa Cook from the central bank for now. But the opinion leaves open the possibility of dismissing her in the future.The court did not rule whether Trump ultimately will have the power to fire Cook or any other member of the Fed.Instead, the 5-4 ruling rejected Trump’s bid to pause a lower federal court ruling that had prevented her from being terminated as her lawsuit challenging her dismissal proceeds. Trump had claimed he sought to fire Cook because of allegations she committed mortgage fraud, which she adamantly denied.Chief Justice John Roberts wrote the opinion for the majority, which included his fellow conservative justice Brett Kavanaugh, as well as the court’s three liberal members, Elena Kagan, Sonia Sotomayor and Ketanji Brown Jackson. The four other conservative justices dissented.”Not only the fact of independence but also the appearance of independence is key to the Federal Reserve’s design,” Roberts wrote.In a footnote, Roberts said the ruling did not bar Trump from trying again to remove Cook over the alleged mortgage fraud if he chose to do so.But the ruling said Trump’s first attempt failed because Cook was not given the due process she was owed under federal law. Any new move against her would require additional steps, including an explanation of the evidence against her, a way for her to respond and a deadline for that response.”And only then can the courts assess the validity and sufficiency of such charges,” Roberts wrote.Trump, in a post on Truth Social after the ruling, said the court had sent the case back “on a strictly procedural basis” and vowed to take further action against Cook.”We will take appropriate action immediately to make sure that someone who has committed wrongdoing will not be making vital decisions concerning the Welfare of the United States of America,” Trump wrote.Roberts wrote in the majority opinion that the court saw “no reason to leave the public in limbo, or to sow doubt as to the status of one of our Nation’s (and the world’s) most important financial institutions.”Roberts said Congress had designed the Federal Reserve to operate with independence from the president and that any altering of that structure would have to come from lawmakers.”Any change in that scheme must come from Congress, not the courts,” Roberts wrote. “That is why we cannot accept the Government’s contentions in this case. To do so would allow the President to remove a member of the Federal Reserve at any time, for any reason, without any notice before, and without any judicial check after.”Justice Samuel Alito, joined by Justice Neil Gorsuch, dissented, arguing that the court should not have issued such a sweeping opinion at this stage of Cook’s case.”The nascency of this lawsuit and the novelty of the issues that it presents militated against holding oral argument and issuing a comprehensive opinion at this juncture.”Justice Clarence Thomas, in a separate dissent, accused the majority of making “policy arguments” for an independent central bank that he said were “ultimately arguments against the Constitution.””Today’s decision is an unprecedented incursion on the Executive Branch,” Thomas wrote.Federal Reserve Board Governor Lisa Cook speaks on “The Outlook for the Economy and Monetary Policy” at the Brookings Institution in Washington, D.C., U.S., November 3, 2025. Kevin Lamarque | ReutersThe ruling came nearly nine months after Trump said he was firing Cook because she had been accused by a Trump-appointed official of committing mortgage fraud before becoming a Fed governor. The court ruled in the Cook case the same day it expanded presidential powers via a decision in a different case, affirming Trump’s firing of Federal Trade Commission Commissioner Rebecca Slaughter.But she has remained on the Fed’s Board of Governors since then, after a federal district court judge and then the Supreme Court blocked her removal pending the outcome of her lawsuit challenging Trump’s action.Despite Trump’s claim that he wanted to remove Cook because of the mortgage fraud allegation, Cook and others believed he was motivated by her refusal to vote for interest rate cuts that the president demanded from the Fed in the first nine months of his second term in the White House.Under the Federal Reserve Act, a president can remove a Fed governor only “for cause.””This was never about mortgage documents signed years before I became a Federal Reserve governor,” Cook said in a statement Monday.”It was an attempt to remove me on a manufactured pretext because I refused to bow to political pressure and continued to set interest rates based only on what would best serve the American people,” she said.”That is the most fundamental obligation of a Federal Reserve governor. Today’s ruling affirms a principle that has underpinned sound economic stewardship for generations: that the Federal Reserve must make all its policy decisions guided by evidence and independent judgment, free from political interference. This bedrock principle has guided the Federal Reserve since its founding.”Read more CNBC politics coverageThe Supreme Court heard oral arguments in Cook’s case on Jan. 21. During the hearing that day, multiple justices expressed skepticism at arguments by a Justice Department lawyer that Trump had legal grounds to fire her.Kavanaugh said the argument by the lawyer, Solicitor General D. John Sauer, that a president could fire any Fed governor for cause without being subject to review of that decision by a judge “would weaken, if not shatter, the independence of the Federal Reserve.”Cook is the first Black woman to serve as a Fed governor. An appointee of former President Joe Biden, she had denied the allegations of mortgage fraud, which were made last summer by FHFA Director Bill Pulte, who later filed criminal referrals against her with the Justice Department.Pulte, who is now also the director of national intelligence, in a statement after Monday’s ruling, stood by his accusations.”As I have repeatedly said, I believe Lisa Cook will be indicted for mortgage fraud,” Pulte said in a post on X.Sen. Elizabeth Warren, D-Mass., a longtime critic of Trump’s efforts to pressure the Fed, seized on the ruling as a rebuke of both the president and Pulte.”Even a Supreme Court stacked by Donald Trump agrees that his attempt to fire Lisa Cook was illegal,” Warren said in a post on X. “Donald Trump and his lackey Bill Pulte have now failed to fire former Chair Jerome Powell and Governor Cook.”Warren called for Pulte to be removed, and warned that “Trump’s effort to take over America’s central bank is far from over.”Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.



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