President Trump suggests his administration won't back down in the Cook case
What's next for Federal Reserve governor Lisa Cook after the the U.S. Supreme Court's ruling this week?
The Supreme Court's ruling in favor of Federal Reserve governor Lisa Cook will require the Trump administration to do a lot more work in order to oust her from the central bank, and a definitive resolution could be months or even years away.
That's the view of legal experts as they assess the ramifications of this week's 5-4 decision, which has allowed Cook to remain in her position but states that President Donald Trump can try again to fire her.
Trump officials "now have to fill in the gaps of this claim about mortgage fraud," said Jed Shugerman, a professor at Boston University's law school. He was referring to Trump's claim that Cook should be fired because she engaged in mortgage fraud on two loan documents signed before she joined the Fed in 2022. She has denied the fraud allegation.
The administration appears set to "try to make the the basis for removal more formal, and make it look more legitimate," Shugerman told MarketWatch. But its new effort could be viewed as "tainted" by U.S. courts, he said, because last August it was "done in a way that does not look like any kind of legal proceeding," as officials went through "social-media sites and screenshots."
It looks "very hard to clean that up," so lower courts are likely to be sympathetic to Cook's arguments in the future. However, if her case ends up back at the Supreme Court, she might not win there again, he added. "I think all bets are off if this gets back to the Supreme Court."
But a final outcome could be a long time coming.
"Who knows if this will get resolved before the 2028 election? I know that sounds crazy, but look how long it took for this case just to get to the Supreme Court on this procedural basis," Shugerman said. It could take six months or even a year for a district court to review and decide on a fresh development in Cook's case, then it could take another six months or more for an intermediate court to give its ruling.
Chief Justice John Roberts offered a rough blueprint for how the Trump administration should proceed in the majority's opinion, which he wrote. "At minimum, Cook was entitled to some explanation of the evidence at issue, some avenue for a response, and a deadline by which a response would be due," Roberts said. "Only after Cook has had the opportunity to respond to the charges made against her may a final decision be made. And only then can the courts assess the validity and sufficiency of such charges."
Cook's case could get resolved by lower courts in the coming months, rather than by Roberts and his fellow justices, according to Thomas Berry, director of the Robert A. Levy Center for Constitutional Studies at the Cato Institute, a libertarian think tank in Washington, D.C.
"The Supreme Court doesn't tend to take cases that are really just about factual disputes," Berry told MarketWatch. "They're only taking cases to make decisions about the law that set the rules of the road going forward. So they've made the key decision here, which is the ground rules."
"Yes, she has tenure protection. Yes, that protection is constitutional and due-process rules apply, if they want to try to remove her. So the lower courts are going to apply those rules of the road," he said.
Berry also said he sees two reasons the Trump administration may decide to drop its efforts to oust Cook.
First, it doesn't seem as important for Trump to remove her now that his appointee, Kevin Warsh, is serving as Fed chair, taking over from Jerome Powell, whom Trump had been criticizing for months. Second, the Cook case was about setting a precedent, but it didn't work out for Trump, so it might be best for him to just move on.
A Trump victory at the Supreme Court in the Cook case "would have been a very important precedent that would have probably allowed multiple Fed governors to be removed, not just this one, so the fact that the Trump administration has lost that key legal point means they have a lot less to gain from dragging out this particular dispute," Berry said.
In a separate ruling on Monday tied to Trump's firing of Rebecca Slaughter, a commissioner at the Federal Trade Commission, the Supreme Court did deliver a big win for the president. That decision basically means that presidents can fire commissioners at other government agencies at will.
In the Cook case, Trump and a key administration official, Bill Pulte, indicated in social-media posts on Monday that they'll keep going after her. That would lead to the additional court proceedings that legal experts are bracing for.
"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, we will take appropriate action immediately to make sure that someone who has committed wrongdoing will not be making vital decisions," the president said. Pulte, who is the head of the Federal Housing Finance Agency, said he believes Cook will be indicted for mortgage fraud.
Now read: New Fed chief Warsh says he's determined to slay inflation. Investors want to know if he really means it.
-Victor Reklaitis
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June 30, 2026 16:42 ET (20:42 GMT)
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