The Supreme Court declined Wednesday to immediately remove Federal Reserve Governor Lisa Cook from her position, leaving her in place at least until the justices hear arguments in the case in January.
The court’s order, which contained no dissents, came in response to an emergency request from the Justice Department seeking to lift a lower-court injunction that has blocked President Trump from removing Cook from the central bank’s Board of Governors.
President Trump moved to dismiss Cook in August, citing mortgage fraud allegations. Cook sued to block her removal, and a federal district court issued a preliminary injunction in her favor, finding she was likely to succeed on the merits of her claims. A divided appeals court panel upheld the injunction.
The dispute centers on the question of when a president can remove a Fed governor before the end of a statutory 14-year term. The law says that a president can remove a governor “for cause” but does not specify what counts as appropriate cause. The district court said the allegations of fraud did not qualify and that Trump failed to provide adequate due process when attempting to remove Cook.
Critics of the Trump administration say the legal fight over Cook has broader implications for the central bank’s independence from political pressure. Supporters of Trump’s efforts to remove Cook say that her continuing to serve on the board while under investigation for alleged mortgage fraud compromises the integrity of the central bank.
Cook’s continued presence means she will participate in the Fed’s Oct. 28-29 policy meeting, when officials are expected to consider additional interest-rate cuts, and the December 9-10 meeting. The central bank reduced its benchmark rate by half a percentage point in September, after refusing to cut rates since President Trump took office in January.
The Fed hasn’t taken a position in the litigation, saying it will comply with whatever the courts decide.
The Supreme Court scheduled oral arguments for January but hasn’t set a specific date. The Federal Reserve has a monetary policy meeting scheduled for January 27 and 28 next year.
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