The US Federal Reserve Governor, Lisa Cook, will remain in her position for the time being despite an attempt by Donald Trump to remove her from the central bank’s board. The US supreme court has delayed a decision on the Department of Justice’s request to permit the president to dismiss Cook, pending oral arguments scheduled for January.
Trump has initiated an unprecedented effort to gain greater control over the Fed. This has included publicly criticizing the bank’s decisions, appointing an ally to the board, and attempting to fire Cook. His actions have raised concerns about the independence of the Fed, which has traditionally operated without political interference.
Trump attempted to remove Cook in August, citing unconfirmed allegations of mortgage fraud predating her time at the Fed, which began in 2022. Cook has refuted the allegations and argued that the president lacks the authority to dismiss her. The Supreme Court considered the attempt to remove Cook, the first such action by a president against a Fed official, and the administration’s objections to a judge’s order that temporarily blocked the firing. The justices declined to immediately rule, allowing Cook to remain in her role for now.
Legal representatives for Cook expressed satisfaction with the court’s decision, which allows her to continue serving on the Federal Reserve board. The White House press secretary stated the administration looks forward to the oral arguments before the court. An expert suggests that the court’s actions are favorable for both sides and will protect the Fed’s independence in the short term.
The Federal Reserve Act of 1913 established the Fed and included provisions to protect it from political interference, requiring a governor’s removal to be “for cause,” though the term is undefined, and no removal procedures are explicitly stated. This law has yet to be tested in court. A district judge ruled that Trump’s claims against Cook, which she denies, were likely insufficient grounds for her removal under the Federal Reserve Act. Cook, who is the first Black woman to serve as a Fed governor, sued Trump after he announced his intention to remove her, claiming the allegations were a pretext for her dismissal due to her monetary policy stance.
Trump has been open about his plans to influence the Fed, including building a majority on its interest-rate setting committee. He has repeatedly called for rate cuts and criticized senior Fed officials, including Chair Jerome Powell, who has consistently defended the Fed’s independence. Powell’s term ends next year, and the administration is already planning for his successor.