The US Supreme Court announced on Wednesday that it will hear oral arguments in January regarding President Donald Trump’s effort to remove Federal Reserve Governor Lisa Cook. This marks the first time a sitting president has sought to fire a Fed official, raising questions about presidential power and the independence of the central bank. For now, Cook, an appointee of former President Joe Biden, remains in her position as the legal battle continues.
At the center of the dispute is the Federal Reserve Act of 1913, which requires that Fed governors be removed by a president only “for cause,” though the law does not define the term or set removal procedures. This provision has never been tested in court. President Trump cited claims of mortgage fraud against Cook, which she denies, as justification for her removal.
However, US District Judge Jia Cobb ruled on September 9 that the claims likely did not meet the standard of “for cause” removal under the law. Cook, who became the first Black woman to serve as a Fed governor, filed suit against Trump in August after he announced his intention to remove her.
FEDERAL COURTS BLOCK COOK’S REMOVAL, SETS STAGE FOR SUPREME COURT REVIEW
The Supreme Court declined to immediately decide on the Justice Department’s request to pause Judge Cobb’s order, which temporarily blocked the president from removing Cook. Instead, the justices deferred the decision until after hearing arguments in January, leaving Cook in her role for now. A 2-1 ruling by the US. Court of Appeals for the District of Columbia Circuit, on September 15, also denied the administration’s request to stay Cobb’s order. Recent Supreme Court decisions have allowed Trump to remove members of other federal agencies previously considered independent, but the court has not yet ruled on whether those precedents apply to the Federal Reserve.
SUPREME COURT’S BIG SIGNALS ON FED
The Supreme Court, which currently has a 6-3 conservative majority, has indicated that it may view the Federal Reserve as distinct from other executive agencies. In a previous case involving Trump’s dismissal of two Democratic members of federal labour boards, the court noted that the Fed “is a uniquely structured, quasi-private entity” with its own historical tradition.
The outcome of the January hearings will determine whether Cook remains in her post or must step down while her legal challenge proceeds. The court has not yet set a specific argument date, but sessions are scheduled for two weeks in mid-January.
– Ends
Tune In