The Supreme Court ruled 5-4 on June 29 that President Donald Trump cannot fire Federal Reserve Governor Lisa Cook, rejecting his attempt to remove her over mortgage fraud allegations she denies.
Cook, a Democratic appointee and the first Black woman to serve as a Fed governor, will remain on the central bank’s board while she challenges Trump’s removal bid in lower courts. The decision marks a significant setback for the president’s effort to exert unprecedented control over the Federal Reserve’s monetary policy decisions.
Trump moved to fire Cook in August 2025 through a social media post, citing allegations that she had fraudulently declared more than one home as her primary residence to obtain a favorable interest rate on a mortgage. Cook has denied the charges, and bank documents obtained by NBC News appear to contradict the fraud claim.
Chief Justice John Roberts authored the majority opinion, creating what amounts to a Federal Reserve exception to the court’s broader push to expand presidential removal power. The court found that the Fed is “a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” distinguishing it from other independent agencies.
Federal law restricts presidents from removing Fed governors except “for cause,” a term the statute does not define. Cook argued that Trump’s attempt to remove her without a legitimate opportunity to defend herself would render the removal protections meaningless. Her lawyer, Paul Clement, told the court during January oral arguments that allowing Trump to proceed would undermine the entire purpose of the Fed’s independence structure.
The Trump administration countered that keeping Cook on the board would damage the Fed’s reputation. Solicitor General John Sauer told the court that “the American people should not have their interest rates determined by someone who was at best grossly negligent in obtaining favorable interest rates for herself.”
Trump has criticized the Fed for not lowering interest rates fast enough and has pushed for monetary policies that would boost the economy ahead of 2026 midterm elections. Every living former Federal Reserve chair, along with many economists, had emphasized to the Supreme Court the importance of maintaining the central bank’s independence from political pressure.
Court Grants Trump Broader Power Over Other Agencies
On the same day, the Supreme Court issued a separate ruling that gave Trump a major victory in a parallel case. The justices allowed Trump to fire Rebecca Kelly Slaughter, a Democratic commissioner of the Federal Trade Commission, overturning the landmark 1935 Supreme Court decision in Humphrey’s Executor v. United States, which had upheld restrictions on the president’s power to remove FTC members.
The two decisions, both authored by Chief Justice Roberts, illustrated the court’s inconsistent approach to presidential removal power. While the conservative majority has generally favored expanding executive authority over independent agencies, the justices carved out a specific exception for the Federal Reserve.
The FTC ruling has broader implications beyond Slaughter’s case. The logic applies to other agencies with similar restrictions on presidential removal, including the Consumer Product Safety Commission, the Surface Transportation Board, and the Equal Employment Opportunity Commission. Trump has already sought to remove members from several of these agencies since taking office in January 2025.
Lower courts will now continue to debate whether Trump has sufficient cause for removing Cook. But the Supreme Court’s decision ensures that the Fed retains some insulation from presidential pressure, at least for now. Cook has roughly 10 years remaining on her 14-year term.
Sources
- NBC News — Supreme Court ruling on Cook and FTC case, vote count, Chief Justice Roberts authorship, details on both cases, and context on Trump’s broader executive power agenda
- USA Today — Cook remaining on the board, Trump’s August 2025 firing attempt, mortgage fraud allegations, Cook’s denial, lower court proceedings, and Fed independence background
- The New York Times — Confirmation of June 29, 2026 ruling date and live coverage of decision
- SCOTUSblog — Background on the case and court’s reasoning
