The US Supreme Court has blocked President Donald Trump's attempt to fire a governor of the US central bank, in a 5-4 ruling seen as affirming the Federal Reserve's independence. Justices said the administration had not provided Federal Reserve Governor Lisa Cook sufficient 'due process' to contest her removal. The decision sends the matter back to lower courts, where the administration will have to prove its allegations that Cook committed mortgage fraud if it wishes to proceed with the firing, and where Cook would have a chance to challenge the accusation.
Cook has denied the allegations, which Fed defenders say are a pretext to allow Trump to assert more control over the bank. By law, a president can only remove governors of the Federal Reserve 'for cause', a requirement intended to shield the bank from political pressure. Trump announced his plan to remove Cook in August on social media, citing claims that she had filed mortgage forms claiming two different principal residences at the same time. Arguing before the court in January, Cook's lawyer Paul Clement said the administration's handling would make Congress' intended protection for the Fed 'kind of a joke'.
“US Supreme Court blocks Trump's firing of Fed Governor Lisa Cook in 5-4 ruling”
Solicitor General John Sauer, who argued for the White House, told the court that the social media post provided sufficient notice and opportunity to respond, and that the issue, even if inadvertent, amounted to 'negligence' that could undermine confidence in the Fed. Following the ruling, Cook said the case was 'never about mortgage documents', calling the allegations a 'manufactured pretext' because she refused to bow to political pressure on interest rates. She added that the central bank must make policy decisions guided by 'independent judgement, free from political interference'.
While the Cook ruling shielded the Fed from immediate White House interference, the court also delivered a separate 6-3 decision written by Chief Justice John Roberts that weakens the independence of other federal regulators. That ruling allows the president to fire members of independent agencies at will, handing a major victory to the Trump administration and leaving bodies like the Federal Trade Commission far more vulnerable to shifts in administration priorities, effectively overturning a 90-year-old legal precedent.