The United States Supreme Court reinforced the Federal Reserve's independence from the White House, protecting governors from being fired by the president without proof of wrongdoing. Voting five to four, the high court said Fed Governor Lisa Cook can stay in her job while she fights Trump's bid to oust her over unproven mortgage fraud allegations. The justices faulted Trump for not giving Cook notice and a chance to be heard before trying to remove her from her position.
Court affirms Fed independence but leaves door open for Trump
Writing for the court, Chief Justice John Roberts said that "monetary policy should not be subject to political interference." He and Justice Brett Kavanaugh joined the three liberals in the majority. The court stopped short of saying whether the allegations, if true, would be sufficient grounds for removing Cook in the midst of her 14-year term. Roberts said the court was ruling "on narrow grounds."
The narrow focus of the decision means the case could return to the Supreme Court at a later point. Roberts left open the possibility of Trump "trying again, if he chooses to do so" to fire Cook.
Cook responds, Trump vows action
Cook said in a statement the 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." Regarding the Cook ruling, Trump said on social media Monday "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!"
The administration accuses Cook of fraudulently listing homes in Michigan and Georgia as a "primary residence" to secure more favourable terms on loans when she obtained mortgages in 2021. Cook has said the claims are baseless and rely on "cherry-picked, incomplete snippets" of documents. The veracity of the allegations wasn't before the Supreme Court, and Cook has not been charged with any wrongdoing.
Fed shield stands apart from broader ruling on presidential power
The Fed shield came even as the court in a separate ruling expanded the president's power to fire top government officials at other federal agencies in a blockbuster ruling that overturns a 91-year-old precedent. The other ruling lets Trump fire Democratic Federal Trade Commission member Rebecca Kelly Slaughter despite a law that says commissioners can be removed only for specified reasons. In his majority opinion in that case, Roberts reiterated previous suggestions that the Fed is different from other federal agencies because of its role in setting monetary policy, something that has traditionally been independent from the White House.
The Federal Reserve declined to comment. The cases tested the Supreme Court's commitment to the central bank's autonomy. The court previously had moved to shield the Fed from Trump's efforts to seize control, but the Cook case presented a new set of legal issues.
