Supreme Court Upholds Lisa Cook's Fed Position, Sets January Hearing

Supreme Court Defers Immediate Removal of Fed Governor Lisa Cook

The United States Supreme Court on Wednesday, October 1, 2025, issued a brief, unsigned order allowing Federal Reserve Governor Lisa Cook to remain in her position, at least temporarily. The high court declined to act on President Donald Trump's administration's request for her immediate removal and announced it would hear arguments in January 2026 concerning the president's authority to dismiss a Fed governor. This decision ensures that Cook will continue to serve on the central bank's board pending further legal proceedings.

Background of the Dispute and Allegations

The legal battle stems from President Trump's attempt to fire Governor Cook in late August 2025. Trump cited allegations of mortgage fraud that purportedly occurred before Cook joined the Federal Reserve Board. Cook, who was appointed by Democratic President Joe Biden in 2023, has denied these allegations and filed a lawsuit challenging her removal. Her legal team argued that she was not provided sufficient notice or an opportunity to respond to the claims, and that Federal Reserve governors can only be removed 'for cause' related to misconduct while in office.

Lower Court Rulings and Supreme Court's Path Forward

Prior to reaching the Supreme Court, lower courts had sided with Cook. A federal judge, U.S. District Judge Jia Cobb, ruled that Cook's purported removal was likely illegal, stating that the 'for cause' requirement does not apply to conduct before taking office and that Cook's due process rights were likely violated. An appeals court subsequently rejected the Trump administration's emergency appeal to proceed with her firing. The Supreme Court's decision to hear arguments in January will address whether President Trump can fire Cook and the extent to which federal judges can prevent such dismissals or merely order back pay for wrongly removed officials.

Implications for Federal Reserve Independence

This case has significant implications for the long-standing independence of the Federal Reserve, an institution designed to be insulated from day-to-day political pressures. No U.S. president has ever fired a sitting Fed governor in the central bank's 112-year history. Cook's lawyers warned that allowing her immediate removal would 'dramatically alter the status quo, ignore centuries of history, and transform the Federal Reserve into a body subservient to the President's will.' A high-profile group, including former Fed chairs Alan Greenspan, Ben Bernanke, and Janet Yellen, along with former treasury secretaries, filed an amicus brief supporting Cook, emphasizing that political interference could jeopardize 'the credibility and efficacy of U.S. monetary policy.'

Temporary Stay and Upcoming Arguments

The Supreme Court's temporary ruling means Governor Cook will be able to participate in upcoming Federal Reserve meetings, including those scheduled for October and December 2025, and cast votes on interest rates. The full arguments in the case are set for January 2026, at which point the Supreme Court will deliver a more definitive ruling on the president's power to remove members of independent federal agencies.