Supreme Court Blocks Trump From Firing Lisa Cook, Backing Fed Independence

The Supreme Court has blocked U.S. President Donald Trump from firing Federal Reserve Governor Lisa Cook in a win for Federal Independence. This presents a major setback to the President, who continues to push for lower rates but has yet to gain a majority on the Fed Board.

Supreme Court Backs Lisa Cook In Case Against Trump

The Supreme Court ruled in favor of Lisa Cook, with 5-4 justices rejecting President Trump’s move to fire the Fed governor over alleged mortgage fraud. This follows an almost yearlong legal battle, during which the President first fired her, citing mortgage fraud as sufficient cause to oust the Fed governor.

Chief Justice Roberts, who delivered the opinion, noted that accepting the government’s position would allow the President to remove a Fed member at any time and for any reason, without prior notice or any judicial check. “That would turn for-cause protection into little more than at-will employment,” he added.

The Chief Justice also noted that the case at hand wasn’t about whether there was cause for President Trump to fire Lisa Cook, but rather about the appropriate legal standards the court must apply in evaluating the facts.

“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, the Chief Justice said.

This development comes as President Trump pushes for lower interest rates, with the President yet to gain a majority on the Fed Board. As CoinGape reported, the Fed left interest rates unchanged at the June FOMC meeting even as most Fed officials leaned hawkish in their economic projections.

Trump Reacts To The Supreme Court’s Decision

In a Truth Social post, President Trump said the Supreme Court sent the Lisa Cook lawsuit back strictly on procedural grounds. “We 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.

Amid the lawsuit, President Trump may have to wait longer to see lower interest rates as inflation concerns mount. As CoinGape reported, the PCE inflation has surged by 4.1%, marking its highest level since 2023.

Rising inflation has also led to predictions of a Fed rate hike this year, with Bank of America predicting three hikes starting from the FOMC meeting. Polymarket data also shows a 53% chance of a Fed rate hike this year.