The Supreme Court on Wednesday allowed Federal Reserve Governor Lisa Cook to remain in her post pending oral arguments in January on whether President Donald Trump has legal cause to fire her.
The court’s move is a blow to Trump, who has repeatedly and unsuccessfully asked federal courts to allow him to terminate Cook from the Fed’s Board of Governors without delay.
Trump has cited claims that Cook committed mortgage fraud as his reason for firing her. Cook denies any wrongdoing in connection with statements she made in applying for mortgages on two homes she owns in Michigan and Georgia.
The court simply noted the ruling without explanation, saying that a request from Trump to stay an injunction against removing Cook is “deferred pending oral argument in January 2026.”
Aside from the immediate issue of getting Cook removed, the administration’s effort is seen as a potential landmark case for the long-held veneer of independence the Fed has enjoyed from political interference.
Cook has not been charged with any crimes despite the White House’s allegation of fraud. Still, Trump has insisted that the accusations alone rise to the standard of “cause” that it would take for him to be able to remove a Fed official.
CNBC has reached out to the Fed for comment.
In supporting documents for the stay, the White House argued that the injunction amounted to “yet another case of improper judicial interference with the President’s removal authority.”
As a practical matter, Wednesday’s ruling allows the Fed to carry on with business at least through the end of the year.
With the court decision, Cook will vote at the Federal Open Market Committee’s October and December meeting for sure and possibly in January.
The committee in September voted to lower its benchmark borrowing rate by a percentage point. In addition, officials indicated additional quarter percentage point reductions at the two remaining meetings this year. However, projections included a close call of just 10-9 participants between one cut and two cuts, so having Cook on board presumably keeps the balance tilted towards two, particularly considering a recent spate of weak labor market data.
But Trump has pushed for even more, imploring Chair Jerome Powell and the committee to slash the benchmark federal funds rate aggressively. Governor Stephen Miran was confirmed just before the September vote and dissented from the cut in favor of a larger half-point move.
Moreover, Miran indicated in the committee’s “dot plot” of individual expectations that he wants to see another 1.25 percentage points lopped off the funds rate by the end of 2025. Cook has not indicated a preference, though like Powell has advocated a cautious approach to easing policy.