Supreme Court lets Lisa Cook stay at Federal Reserve for now

October 1, 2025

The US Supreme Court has ruled that Lisa Cook can temporarily remain as Federal Reserve governor, rejecting President Donald Trump's attempt to immediately remove her. Trump had claimed he was firing Cook over alleged mortgage fraud, which she denied, prompting her to sue on grounds that her dismissal was illegal and threatened the Fed's independence. The Supreme Court will hear arguments in January on this unprecedented case, as no president has previously attempted to remove a Fed governor, which by law can only be done "for cause.

Who is affected

Lisa Cook, Federal Reserve governor
President Donald Trump and his administration
The Federal Reserve Board
Federal Reserve Chairman Jerome Powell
The White House economic adviser Stephen Miran (temporarily filling a board vacancy)
Financial markets and Wall Street observers expecting rate cuts

What action is being taken

The Supreme Court is keeping Cook in her position temporarily while the case proceeds
The Court is scheduling arguments over Cook's firing for January
Cook is continuing her role on the Federal Reserve Board, including voting on interest rates
The Trump administration is pursuing the legal case against Cook
The Federal Reserve is currently engaged in cutting interest rates, having made its first cut in nearly a year on September 17

Why it matters

This represents an unprecedented challenge to Federal Reserve independence, as no president has previously attempted to remove a governor
The case tests the legal interpretation of the "for cause" standard for removing Fed governors
Cook will remain able to vote on monetary policy decisions that impact the economy
The situation highlights tensions between the White House and the Federal Reserve regarding interest rate policy
The outcome could potentially set precedent for presidential authority over independent agencies

What's next

The Supreme Court will hear arguments over Cook's firing in January
The Federal Reserve Board will meet at the end of the month and again in December to decide on further interest rate reductions

Read full article from source: BBC