Fed Gov Lisa Cook notches temporary win in Trump lawsuit
In an unsigned order, the Supreme Court delayed until January its decision on the president’s attempt to immediately remove Cook.
The Federal Reserve official President Donald Trump attempted to fire in August can keep her job until at least January 2026, the U.S. Supreme Court said in an Oct. 1 order.
Through its order, the high court is deferring action on Trump's request to remove Fed Governor Lisa Cook while her lawsuit challenging her termination plays out.
How we got here: On Aug. 25, Trump announced his intent to fire Cook over allegations that she committed mortgage fraud in 2021, before her term at the Fed began in 2022. Cook, who has been neither charged nor convicted of any crime, denied the allegations. Cook sued to keep her job days later, arguing that the president did not have cause to fire her.
On Sept. 9, U.S. District Judge Jia Cobb allowed Cook to keep her position at the Fed while the legal dispute played out.
Concerns about the Fed's independence: After Trump elevated the issue to the Supreme Court, a bipartisan group of former government officials co-signed a letter raising concerns about the future of the central bank's independence if the court permitted Cook's immediate termination.
The removal attempt — in conjunction with Trump's criticisms of the Fed's extended freeze on short-term interest rates and his push for Chair Jerome Powell's resignation — also alarmed some economists, leading to speculation that Trump's move to fire Cook may be more about shaping the Fed.
While Fed governors are appointed by the president, the administration's involvement typically ends there. But during an Aug. 26 cabinet meeting, Trump remarked, "We will have a majority very shortly" — a reference to his share of nominees on the Fed's Board of Governors should Cook be replaced — signaling an interest in influencing Fed policy.
If Trump is successful in his efforts to remove Cook, he would become the first president in the Fed's 112-year existence to do so.
What the White House had to say: The president "lawfully removed Lisa Cook for cause," White House spokesperson Kush Desai told The Associated Press. "We look forward to ultimate victory after presenting our oral arguments before the Supreme Court in January."
What happens next: The Supreme Court's decision allows Cook to retain her position on the Fed's Board of Governors until at least January 2026. At that time, the high court will hear oral arguments on the issue of whether Cook can continue to stay at the Fed while her lawsuit proceeds.
Cook began serving as a Fed governor in May 2022. Her current term expires in January 2038.
Real Estate News has reached out to Cook's legal team and the U.S. Department of Justice for comment.