The Supreme Court has blocked President Donald Trump's effort to remove Federal Reserve Governor Lisa Cook from the central bank, delivering a significant – if procedurally narrow – victory for the Fed's institutional independence.
The 5-4 ruling preserved Cook's position while her lawsuit challenging the firing continues to play out in the lower courts. No president had previously attempted to remove a sitting Fed governor in the central bank's 111-year history.
Chief Justice John Roberts, writing for the majority, was joined by fellow conservative Justice Brett Kavanaugh, as well as the court's three liberal members — Elena Kagan, Sonia Sotomayor, and Ketanji Brown Jackson. The four remaining conservative justices dissented.
In its Monday decision, the Supreme Court sidestepped the underlying legal question of whether Trump ultimately holds the authority to dismiss a Fed governor. Instead, the ruling rejected Trump's bid to pause a lower federal court order that had prevented Cook from being terminated while her lawsuit challenging her dismissal proceeded.
Roberts grounded the majority's reasoning in the structural design of the Federal Reserve itself. "Not only the fact of independence but also the appearance of independence is key to the Federal Reserve's design," Roberts wrote.
The chief justice noted that Trump's initial attempt to remove Cook was procedurally defective. To pass muster, any new move against Cook would require additional steps, including an explanation of the evidence against her, an opportunity for her to respond, and a deadline for that response. "And only then can the courts assess the validity and sufficiency of such charges," Roberts wrote.
In a concurring opinion, Justice Brett Kavanaugh warned of the economic consequences of ousting a Fed governor without due process. "Even temporary uncertainty about the status of the Federal Reserve could spark political upheaval, including confusion about whether the President could immediately remove multiple Governors at will, as well as turmoil in the U.S. and world economies," Kavanaugh wrote.
Trump had claimed he sought to fire Cook because she had been accused by a Trump-appointed official of committing mortgage fraud, allegations she adamantly denied. Cook and others believed the real motivation was her refusal to vote for the interest rate cuts Trump had repeatedly demanded from the Fed during the first nine months of his second term.
In a statement following the ruling, Cook rejected the framing that the case was ever about her financial history. "This was never about mortgage documents signed years before I became a Federal Reserve governor," she said. "It was an attempt to remove me on a manufactured pretext because I refused to bow to political pressure and continued to set interest rates based only on what would best serve the American people."
Cook, who is an appointee of former President Joe Biden and the first Black woman to serve on the Fed's Board of Governors, added that the ruling reaffirmed a cornerstone of sound monetary stewardship. "The Fed must operate free from political interference. This decision is a victory for the rule of law and for every American who depends on a stable economy," she said.
Despite the ruling, Trump vowed to press ahead. In a post on Truth Social following the decision, he characterized the court's action as decided on "a strictly procedural basis" and said his administration would "take appropriate action immediately."
The ruling comes against a backdrop of sustained pressure on the central bank. Throughout the last months of his tenure, former Fed Chair Jerome Powell had resisted calls from Trump to cut rates, warning publicly that politicizing the central bank risks permanently eroding public confidence in the institution.
In January, Powell revealed that the Department of Justice had opened a criminal investigation into the $2.5 billion renovation of the Federal Reserve's office buildings, which the administration has characterized as a "grossly mismanaged" project.
"This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress's oversight role," Powell said in a statement at the time, arguing that the threat of criminal charges was actually being made as "a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President."
The DoJ ultimately decided to abandon its probe into the project under Powell in April, with District of Columbia US Attorney Jeanine Pirro announcing her office has asked the Fed's internal watchdog to look into the matter.
The question of Fed independence under Trump was one that hung heavily over Kevin Warsh, the president's nominee to succeed Powell. In arguably the first test of his ability to resist executive pressure to cut rates, the Fed under Warsh unanimously elected to hold rates steady at 3.5% to 3.75% in its policy meeting this month, offering markets some reassurance that he would not be swayed.
While AI has become a go-to research tool for affluent investors, new HSBC research suggests human advisors remain the deciding voice when investment decisions are made.
For years, large firms have been facing penalties and questions from regulators over interest rates for clients’ cash accounts.
Market volatility can be stressful, but it also represents opportunity for advisors and their clients.
After years of mixed signals and shifting timelines from Jamie Dimon, Wall Street sources suggest the race to lead JPMorgan Chase has entered its decisive stretch.
Advisors and broker-dealers adjusting to the March 2026 threshold change face bigger challenges around back-end monitoring than the new dollar limit itself.
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.
