US Supreme Court rejects Trump's unprecedented bid to fire Fed's Cook

US Supreme Court rejects Trump's unprecedented bid to fire Fed's Cook Chief Justice John Roberts said Fed governors "may be removed only 'for cause.'" WASHINGTON: The US Supreme Court refused on Monday (Jun 29) to let Donald Trump fire Federal Reserve Governor Lisa Cook as it stood firm to preserve the central bank's cherished independence against an unprecedented challenge by the Republican president. The court, in a 5-4 ruling, blocked Trump's bid to become the first president to remove a Fed official since Congress created the central bank in 1913. In his second term as president, Trump has tested the limits of presidential power in numerous other ways as well. Conservative Chief Justice John Roberts and fellow conservative Justice Brett Kavanaugh were in the majority, along with the court's three liberal justices. Conservative Justices Clarence Thomas, Samuel Alito, Neil Gorsuch and Amy Coney Barrett dissented. Roberts, who authored the ruling, said Trump "failed to afford Cook the procedural protections to which she was entitled by statute. Without such protections, she could not properly dispute the charges the president laid against her." Canvassing the history of the Federal Reserve System and its predecessor central banks since the founding, including the Bank of North America and the First and Second Banks of the United States, Roberts emphasised that all have featured independence from the president. "Like the directors of its three predecessors, however, the Federal Reserve's Governors do not serve at the president's pleasure - they instead serve staggered 14 year terms, and may be removed only 'for cause,'" Roberts added. Trump last August had cited unproven mortgage fraud allegations in trying to oust Cook, the first Black woman to serve as a Fed governor, while she called that a pretext to remove her for monetary policy differences. "I REFUSED TO BOW" In a statement on Monday, Cook welcomed the court's decision, saying it affirms the Fed's obligation to make policy decisions independently, free from political interference. "This was never about mortgage documents signed years before I became a Federal Reserve governor. It was an attempt to remove me on a manufactured pretext because I refused to bow to political pressure and continued to set interest rates based only on what would best serve the American people," Cook said. The justices denied a request from Trump's Justice Department to lift a judge's order barring him from immediately firing Cook while her legal challenge to the termination continues to play out in a lower court. Cook denied Trump's allegations. The court said its ruling was not deciding the validity of the factual dispute in the case, which can now return to lower courts where action has been stalled while the Supreme Court weighed in. "It at least remains an open question what precisely happened here, and indeed whether Cook committed 'gross negligence,' let alone 'deceitful and potentially criminal conduct,' as the president's letter alleges," Roberts wrote, adding that Cook must be able to respond to the charges made against her. 'APPROPRIATE ACTION' Trump reacted to the decision in a social media post. "The Cook Lawsuit, having to do with her suitability in sitting on the Board of the Federal Reserve, was sent back by the Supreme Court on a strictly procedural basis, 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!" Trump wrote. In another ruling on Monday, the Supreme Court backed Trump's firing of Rebecca Slaughter, a Democratic Federal Trade Commission member, expanding his powers over the government and overturning its 1935 precedent that had recognized the authority of Congress to protect leaders of certain regulatory agencies from presidential removal at will. Trump in separate comments on social media called the Slaughter ruling "one of the most important ever given with respect to Presidential Powers." Monday's Cook ruling follows the February 20 decision by the justices in another case with major economic ramifications to strike down most of Trump's sweeping global tariffs, a ruling that elicited a vitriolic condemnation of the court by the president. The Fed is the world's most important central bank, an institution that determines the cost of credit for the United States and beyond and which has been in Trump's crosshairs since his return to the presidency in January 2025. Cook's term in the job was due to run until 2038. She was appointed by Democratic former President Joe Biden in 2022. Trump's targeting of Cook and a separate criminal investigation his administration launched in January, but later dropped, against then-Fed Chair Jerome Powell together represented the biggest challenge to the central bank's independence since its founding. May 15 was the final day of Powell's eight years as Fed chair, though he remains a member of its Board of Governors. The US Senate on May 13 voted to confirm Trump's nominee Kevin Warsh as Powell's successor, and he was sworn in on May 22. When the justices in October agreed to hear the case involving Cook, they left her in the post for the time being. The Supreme Court heard arguments in the case in January, with Cook and Powell in attendance.