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The Supreme Court on Monday dealt a blow to President Donald Trump’s effort to remove Federal Reserve Governor Lisa Cook, preserving long-standing protections that shield the central bank from political interference.
The nation’s highest court, in a 5-4 decision, rejected Trump’s bid to remove Federal Reserve Gov. Lisa Cook while her legal challenge moves forward.
The case centered on whether Trump had sufficient legal authority to fire Cook, a question with sweeping implications for the Federal Reserve’s independence and the limits of presidential power over one of the nation’s most influential economic institutions.
Chief Justice John Roberts wrote the majority opinion, joined by fellow conservative Justice Brett Kavanaugh and the court’s three liberal justices — Elena Kagan, Sonia Sotomayor and Ketanji Brown Jackson. Justices Clarence Thomas, Samuel Alito, Neil Gorsuch and Amy Coney Barrett dissented.
The case is one of two major Supreme Court disputes over presidential removal power, alongside Trump v. Slaughter, which stems from the president’s firing of Federal Trade Commission Commissioner Rebecca Slaughter. In that case, the high court overturned the landmark 1935 decision Humphrey’s Executor v. United States, removing longstanding limits on a president’s authority to fire officials serving at many independent federal agencies.
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The Cook decision, however, carved out an exception for the Federal Reserve. While the justices allowed Cook to remain on the Federal Reserve Board as her lawsuit moves forward, they said the Fed stands on a different constitutional footing than other independent agencies because of its unique structure, history and role in the nation’s financial system.
For everyday Americans, the Federal Reserve’s ability to operate free from political pressure can shape everything from mortgage rates and job prospects to the price of groceries. The Fed’s decisions influence how expensive it is to borrow money and how forcefully policymakers respond to inflation or a slowing economy.
The White House and the Federal Reserve did not immediately respond to Fox News Digital’s request for comment following the rulings on Monday morning.
In a statement following the decision, Cook said the case “was never about mortgage documents signed years before I became a Federal Reserve governor,” arguing instead that the effort to remove her was based on a “manufactured pretext” because she refused to allow politics to influence her work at the central bank.
Cook said the ruling reaffirmed the Federal Reserve’s independence, calling it “a principle that has underpinned sound economic stewardship for generations.” She added that she would continue to make decisions “guided by evidence and independent judgment, free from political interference.”
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Stakes are especially high with the future of the Fed as the world’s most powerful central bank enters a new era of leadership under Chair Kevin Warsh, bringing renewed attention to the balance between White House influence and the Federal Reserve’s autonomy.
Critics warn that if presidents can exert more control over the Fed, interest rate decisions could become more political — shaped by election-year pressures rather than the long-term health of the economy.
At the center of the dispute is the Federal Reserve Board of Governors, known as the Fed board, a seven-member panel that helps set U.S. monetary policy and oversees the nation’s banking system. Its members serve on the Federal Open Market Committee, which sets interest rates.
Cook’s ascension to the Fed was historic. Appointed by former President Joe Biden in 2022, she became the first Black woman to serve as a governor.
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Her legal fight traces back to late August 2025, when Trump announced that he was firing her from the Fed board. He alleged she misrepresented information tied to a trio of mortgages she obtained before joining the central bank. Cook has denied any wrongdoing and has not been charged with a crime.
She sued Trump in federal court in Washington, D.C., to block her removal. On Sept. 9, a district court judge barred Trump from firing her while the case proceeds, a decision later upheld by a federal appeals court.
The high-stakes legal fight quickly attracted attention at the highest levels of the Federal Reserve. Powell underscored its significance in January when he attended the oral arguments, a notable departure from his typically low-profile approach.
Powell defended his decision to attend the arguments, telling reporters at the Federal Reserve on Jan. 28 that the dispute was “perhaps the most important legal case in the Fed’s history.”
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Recently, Powell faced his own challenge.
In January, Powell disclosed that the Justice Department had opened a criminal investigation into his congressional testimony about a multi-billion-dollar renovation of the Fed’s headquarters, an unusual development for a sitting Fed chair.
In a rare video statement, Powell called the probe “unprecedented” and described it as another salvo in what he said was Trump’s pressure campaign on the central bank to cut rates.
The move followed days of quiet consultations with advisers and was an uncommon display from a Fed chair better known for a restrained, measured approach.
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In April, Powell told reporters he planned to stay at the Federal Reserve through the completion of ongoing investigations into the Fed headquarters renovation project.
“I have no intention of leaving the [Fed] board until the investigation is fully resolved with transparency and finality,” Powell said, adding that he intends to complete his term as governor through 2028.
Had Powell stepped aside entirely, it would have opened a seat for Trump to fill, giving him another opportunity to shape the Fed’s leadership.
By remaining on the board, Powell retains influence over U.S. monetary policy even after relinquishing the chairmanship in May. This dynamic could intensify tensions with the president.
How that relationship evolves could shape the direction of the Federal Reserve and, by extension, the path of interest rates, inflation and the broader economy as Warsh begins his tenure as chair.
