Cook can remain at the Federal Reserve as litigation continues, say a majority of justices, whose decision is crafted 'fairly narrowly'
The Supreme Court has refused to allow President Donald Trump to fire Federal Reserve governor Lisa Cook, in a move that strengthens the independence of the central bank.
The Supreme Court on Monday allowed Federal Reserve governor Lisa Cook to remain in her post while she challenges President Donald Trump's move to fire her.
Last August, Trump said that he had fired Cook, arguing that she had engaged in mortgage fraud on two loan documents signed before she joined the Fed in 2022.
From the archives (August 2025): Trump says he's fired Fed governor Lisa Cook, in move to control U.S. central bank's board
Cook went to court to block Trump, arguing that she had done nothing wrong. Two lower courts ruled that she could keep her job as her case was being adjudicated. The president then turned to the Supreme Court, which on Monday ruled in Cook's favor in a 5-4 decision.
The Supreme Court was faced with deciding whether a lower court's order that let Cook stay in her job "should remain in effect pending the conclusion of litigation over the attempted removal," and a majority of justices "cannot accept the Government's contentions in this case," Chief Justice John Roberts wrote in the majority's opinion. "To do so would allow the President to remove a member of the Federal Reserve at any time, for any reason, without any notice before, and without any judicial check after. That would turn for-cause protection into little more than at-will employment."
Roberts was joined in the opinion by a fellow conservative justice, Brett Kavanaugh, and by the court's three liberal justices, Ketanji Brown Jackson, Elena Kagan and Sonia Sotomayor.
"To be clear, the ultimate question of whether the President can remove Cook for cause will depend in part on the underlying facts. In this opinion, we have not addressed the facts, as they have yet to be found or analyzed under the relevant legal standards," Roberts added.
"The court was basically saying, [Trump] did it wrong," Taraleigh Davis, an assistant professor of public law and American politics at Bradley University, told MarketWatch. "Announcing on social media that 'you're fired' - that doesn't cut it."
Ruling appears to be limited
Legal analysts stressed that Monday's decision was a focused rather than a sweeping ruling.
"The key is that while this litigation is ongoing, she has her job," Davis said.
"This case, it's a very important case - very important step for the Federal Reserve, but it doesn't decide everything finally," Scott Alvarez, a former general counsel to the Fed, said in an interview on CNBC. "The court simply said that it believes that Cook likely will succeed on the merits, but the courts below are going to have to make a decision about the extent of cause, whether there was cause in this case, so this case is going to go back to the Supreme Court, and we'll probably be talking about it again next year."
Cook and Trump offer their reactions
"Today's ruling affirms a principle that has underpinned sound economic stewardship for generations: that the Federal Reserve must make all its policy decisions guided by evidence and independent judgment, free from political interference," Cook said in a statement after the court's decision.
"The Supreme Court's decision to leave the lower court's order in place and affirm the need for real process and real cause recognizes that Federal Reserve independence is essential to fulfilling the congressional mandate of price stability and maximum employment," she continued.
Cook also said the case "was never about mortgage documents signed years before I became a Federal Reserve governor," but was rather "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."
Trump indicated that his administration won't back down after the high court's ruling.
"The Cook Lawsuit, having to do with her suitability in sitting on the Board of the Federal Reserve, was sent back by the Supreme Court on a strictly procedural basis," the president said in a social-media post. His administration "will take appropriate action immediately to make sure that someone who has committed wrongdoing will not be making vital decisions concerning the Welfare of the United States of America," he added.
One key Trump administration official, Bill Pulte, responded to the decision with a post on social media. "As I have repeatedly said, I believe Lisa Cook will be indicted for mortgage fraud," said Pulte, who is director of the Federal Housing Finance Agency and has led the administration's push to remove Cook. Pulte is also Trump's acting director of national intelligence.
Former Fed chairs backed Cook
Last year, former Fed chairs filed an amicus brief with the high court, warning that the central bank's independence was at risk. Permitting Trump to fire Cook while her litigation was underway could spark a recession, they said.
New Federal Reserve Chair Kevin Warsh has tried to distance himself from the Cook case, in contrast with his predecessor, Jerome Powell, who called it "perhaps the most important legal case in the Fed's 113-year history."
Warsh has said that as Fed chief, he will be independent from the White House, and he told senators at his confirmation hearing in April that Trump had never asked him to "predetermine, commit, fix, decide on any interest-rate decision in any of our discussions, nor would I ever agree to do so."
Fed independence is intended to prevent the central bank from cutting interest rates in order to help a political party win elections. Lower rates can boost employment but can also lead to higher inflation and hurt the economy in the long run.
A majority of Supreme Court justices have allowed Trump's firings of other independent federal agency leaders to go forward. During oral arguments in the Cook case, however, justices expressed unease about allowing the president to fire a member of the Fed.
From the archives (January 2026): Supreme Court justice warns that firing Lisa Cook would lead to a Republican Fed followed by a Democratic Fed
Justice Kavanaugh, a Trump appointee, said during those arguments: "Thinking big picture, what goes around, comes around." He said that "once the tool" to fire a Fed governor was released, it would be used often by both political parties.
Before Warsh's swearing-in, Trump said he would let Warsh "do what he wants to do," shifting his message for the Fed after putting unprecedented pressure on the U.S. central bank for more than a year.
Warsh's nomination moved ahead after Sen. Thom Tillis said he would support it. The North Carolina Republican had threatened to block Warsh's path as long as the Justice Department continued to pursue a probe of Powell. That investigation has been closed.
Powell disclosed in January that he was under criminal investigation for his statements to Congress about cost overruns in the $2.5 billion renovation of the Fed's headquarters. He called questions about his testimony "pretexts" and argued that the probe could undermine the Fed's independence.
Powell told reporters at an April news conference that he would remain in his seat on the central bank's board of governors. He can stay in that position until early 2028.
Victor Reklaitis contributed.
-Greg Robb -Robert Schroeder
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June 29, 2026 13:07 ET (17:07 GMT)
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