The US Supreme Court has ruled that President Donald Trump's attempt to fire Lisa Cook, a Federal Reserve governor, was unconstitutional. In a 5-4 decision, the justices found that the president lacked the authority to remove Cook without proper cause, upholding the procedural protections afforded to members of the central bank's board.
Cook, the first Black woman to serve on the Fed's board, was appointed by Joe Biden and her term is scheduled to run until 2038. Last August, Trump abruptly dismissed her on social media, alleging mortgage fraud—claims that Cook has denied. She subsequently sued, arguing her removal was unlawful because it lacked due process.
The court emphasised that its ruling was narrow, based on the failure to provide procedural safeguards. The decision marks a departure from the court's recent tendency to grant Trump broad powers, having allowed him to fire a Federal Trade Commission commissioner and a National Labor Relations Board member earlier this week.
The ruling is seen as a significant victory for the independence of the Federal Reserve, which sets US interest rates and is traditionally shielded from political pressure. Trump has repeatedly criticised the Fed for keeping rates too high, but most board members have resisted his calls for cuts.
The case arose amid broader tensions between the White House and the central bank. Former chair Jerome Powell, whom Trump originally appointed in 2018, stepped down in May after a justice department investigation into Fed renovation costs was closed. His successor, Kevin Warsh, is expected to be more receptive to lower rates.
