Supreme Court lets Lisa Cook remain as a Federal Reserve governor for
now
[October 02, 2025]
By MARK SHERMAN
WASHINGTON (AP) — The Supreme Court on Wednesday allowed Lisa Cook to
remain as a Federal Reserve governor for now, declining to act on the
Trump administration’s effort to immediately remove her from the central
bank.
In a brief unsigned order, the high court said it would hear arguments
in January over Republican President Donald Trump’s effort to force Cook
off the Fed board.
The court will consider whether to block a lower-court ruling in Cook's
favor while her challenge to her firing by Trump continues.
The high-court order was a rare instance of Trump not quickly getting
everything he wants from the justices in an emergency appeal.
Cook will be able to take part in the remaining two Fed meetings in
2025, including the next meeting of its interest rate-setting committee
in late October.
Separately, the justices are hearing arguments in December in a separate
but related legal fight over Trump’s actions to fire members of the
boards that oversee other independent federal agencies. The case
concerns whether Trump can fire those officials at will.
But a second issue in the case could bear directly on Cook’s fate:
whether federal judges have the authority to prevent the firings or
instead may only order back pay for officials who were wrongly
dismissed.
Trump had sought to oust Cook before the September meeting of the Fed’s
interest rate-setting committee. But a judge ruled that the firing was
illegal, and a divided appeals court rejected the Trumps
administration’s emergency appeal.
A day after the meeting concluded with a one-quarter of a percentage
point reduction in a key interest rate, the administration turned to the
Supreme Court in a new emergency appeal.
The White House campaign to unseat Cook marks an unprecedented bid to
reshape the Fed board, which was designed to be largely independent from
day-to-day politics. No president has fired a sitting Fed governor in
the Fed's 112-year history.
“President Trump lawfully removed Lisa Cook for cause from the Federal
Reserve Board of Governors. We look forward to ultimate victory after
presenting our oral arguments before the Supreme Court in January,”
White House spokesman Kush Desai said.
The court already has suggested that it will view the Fed differently
from other independent agencies and Wednesday's order is another
demonstration of that distinction, said Lev Menand, a professor at
Columbia Law School and author of a book on the Fed.
The justices have allowed other firings to take effect while legal
challenges proceed, including in the case that will be argued in
December involving Rebecca Slaughter, whom Trump fired from the Federal
Trade Commission.
“The court seems to be steering a different course here,” Menand said.
“It has the effect of freezing the status quo that is in favor of Fed
independence.”
[to top of second column]
|
Federal Reserve Board of Governors member Lisa Cook listens during
an open meeting of the Board of Governors, June 25, 2025, in
Washington. (AP Photo/Mark Schiefelbein, File)
Cook, who was appointed to the Fed board by Democratic President Joe
Biden, has said she will not leave her job and won’t be “bullied” by
Trump. Her lawyers said in a statement Wednesday that the court's
decision "rightly allows Governor Cook to continue in her role on
the Federal Reserve Board, and we look forward to further
proceedings consistent with the Court’s order.”
Separately, Senate Republicans recently confirmed Stephen Miran,
Trump’s nominee to an open spot on the Fed’s board. Both Cook and
Miran took part in last month's meeting. Miran was the sole
dissenting vote, preferring a larger cut.
Trump has accused Cook of mortgage fraud because she appeared to
claim two properties, in Michigan and Georgia, as “primary
residences” in June and July 2021, before she joined the Fed board.
Such claims can lead to a lower mortgage rate and smaller down
payment than if one of them was declared as a rental property or
second home.
“Put simply, the President may reasonably determine that interest
rates paid by the American people should not be set by a Governor
who appears to have lied about facts material to the interest rates
she secured for herself — and refuses to explain the apparent
misrepresentations,” Solicitor General D. John Sauer wrote in his
Supreme Court filing.
Cook has denied any wrongdoing and has not been charged with a
crime. According to documents obtained by The Associated Press, Cook
specified that her Atlanta condo would be a “vacation home,”
according to a loan estimate she obtained in May 2021. In a form
seeking a security clearance, she described it as a “2nd home.” Both
documents appear to undercut the administration’s claims of fraud.
U.S. District Judge Jia Cobb ruled that the administration had not
satisfied a legal requirement that Fed governors can only be fired
“for cause,” which she said was limited to misconduct while in
office. Cook joined the Fed’s board in 2022.
Cobb also held that Trump’s firing would have deprived Cook of her
due process, or legal right, to contest the firing.
By a 2-1 vote, a panel of the federal appeals court in Washington
rejected the administration’s request to let Cook’s firing proceed.
Trump’s lawyers have argued that even if the conduct occurred before
her time as governor, her alleged action “indisputably calls into
question Cook’s trustworthiness and whether she can be a responsible
steward of the interest rates and economy.”
___
AP Economics Writer Christopher Rugaber contributed to this report.
All contents © copyright 2025 Associated Press. All rights reserved |
