U.S. Supreme Court hears arguments in Trump's bid to remove Fed governor Lisa Cook

The Supreme Court heard arguments over the Trump administration's effort to allow the president to remove Federal Reserve Governor Lisa Cook while her legal challenge proceeds; a lower court had blocked the removal and Cook remains in her post for now.

The Supreme Court heard arguments on Wednesday about President Donald Trump's effort to remove Federal Reserve Governor Lisa Cook, a case that raises questions about the central bank's independence. The administration asked the justices to lift a lower judge's order that barred the president from firing Cook while her legal challenge proceeds. The dispute stems from mortgage fraud allegations cited by the administration, which Cook denies. The case is notable because no prior president has sought to remove a Fed governor and it tests provisions of the Federal Reserve Act meant to limit political interference. Key details: - The U.S. Solicitor General argued for the administration that the allegations against Cook affect her fitness to serve, and asked the Court to allow removal while the case continues. - U.S. District Judge Jia Cobb ruled in September that the attempted removal without notice or a hearing likely violated Cook's Fifth Amendment due process rights and found the mortgage fraud allegations were likely not sufficient legal cause for removal. - The U.S. Court of Appeals for the D.C. Circuit declined the administration's request to put Judge Cobb's order on hold; when the Supreme Court agreed in October to hear the case it left Cook in her position. - The president posted a termination letter on social media on Aug. 25 citing mortgage fraud allegations disclosed by Federal Housing Finance Agency Director Bill Pulte; Cook has said the allegations are a pretext tied to disagreements over monetary policy. - As a Fed governor, Cook participates in setting U.S. monetary policy; she was appointed in 2022 and her term runs through 2038. The case has been framed as having implications for the Fed's ability to set interest rates independently of political pressure. Summary: The Supreme Court's decision will determine whether the president may remove a Federal Reserve governor under the circumstances cited by the administration and could affect the practical independence of the central bank. Undetermined at this time.