In August 2025, President Trump seemingly fired Lisa Cook, making her the first Governor of the Federal Reserve Board of Governors to be removed in the Federal Reserves 111-year history. The President cited his reason for firing Cook due to his lack of “confidence in [her] integrity,” based on allegations that she made false statements on one or more mortgage applications. This alleged misconduct predated her tenure on the Board. Cook immediately filed suit on the basis that the President’s attempt at removal was not “for cause” as required by the Federal Reserve Act and because she was denied the pretermination process.
Headed for the Supreme Court
The United States District Court for the District of Columbia issued a preliminary injunction to block the removal finding that “cause” reaches only in-office conduct and that Cook was entitled to notice and a hearing that did not occur. The D.C. Circuit declined to stay the injunction based on Cook’s due process claim. The government sought a stay from the Supreme Court, which deferred the application, ordered supplemental briefing, and held oral argument in January 2026.
Limiting the Power of the Executive Branch Over the Fed
On June 29, 2026, the Supreme Court denied the government’s request for a stay. Chief Justice Roberts delivered the opinion of the Court in which Justices Sotomayor, Kagan, Kavanaugh, and Jackson, JJ. joined. The Court held that the government was unlikely to prevail because accepting the government’s position would transform the Federal Reserve’s “for-cause” protection “into little more than at-will employment.” The Court rejected the argument that “cause” is unreviewable and held that the President failed to abide by the statutorily required process which would provide Cook with “some explanation of the evidence,” and “avenue for a response,” and a deadline to respond.
Looking Forward
This issue is likely unsettled by the courts. The court left open whether the President may ultimately remove Cook for-cause, noting that the outcome “will depend in part on the underlying facts” not yet found and the President remains free to revisit this issue following the proper process. The decision reiterates the Federal Reserve’s independence as a “special arrangement sanctioned by history,” signaling that structural change “must come from Congress, not the courts.” Trump v. Cook demonstrates the Court’s effort, at least in this instance, to limit what it viewed as an overreach by the Executive Branch into the non-partisan banking system.