Supreme Court Appears Likely to Keep Fed Governor Lisa Cook in Place for Now

The Supreme Court appeared Wednesday to be leaning toward keeping Federal Reserve Governor Lisa Cook in her job while her lawsuit over President Trump’s attempt to fire her continues, with several conservative justices voicing doubts about the administration’s position. The argument in Trump v. Cook was on the government’s emergency request to let the removal take effect now, and it was not clear whether the court would send the case back to lower courts or rule more broadly, SCOTUSblog reported.

Trump moved to fire Cook in late August 2025, citing mortgage-fraud allegations from Federal Housing Finance Agency Director Bill Pulte about pre-Fed mortgage applications, according to CNBC. SCOTUSblog said the allegations are that she listed two properties as her primary residence before joining the Fed. Cook denies wrongdoing. The Federal Reserve Act allows the president to remove a governor only “for cause,” a term the law does not define. U.S. District Judge Jia Cobb ruled that Cook could stay while her case proceeds, finding she had made a strong showing that the removal violated that provision, and the appeals court upheld the ruling, CNBC reported.

Solicitor General D. John Sauer argued that deceit or gross negligence by a financial regulator could justify removal, and that letting someone with such conduct help set interest rates “sends the wrong message,” SCOTUSblog reported. He told the court the administration asserts “grievous, irreparable injury to the public perception of the Federal Reserve,” CNBC reported. Justice Ketanji Brown Jackson asked Sauer, “Do you have evidence other than the president’s view?” according to CNBC.

Paul Clement, Cook’s lawyer, invoked the Supreme Court’s own description of the Fed as a “uniquely structured, quasi-private entity” and argued that the removal protection must have “real, substantive, and procedural bite,” CNBC reported. SCOTUSblog said he argued that conduct before she joined the Fed should not count as cause, that Congress could impeach her if needed, and that Cook is entitled to notice, a chance to present evidence and a decision-maker who has not prejudged the matter.

Justice Brett Kavanaugh warned that the government’s view, that the president decides cause with no judicial review, would “weaken, if not shatter, the independence of the Federal Reserve,” according to CNBC and SCOTUSblog. SCOTUSblog said he suggested a ruling based on process might be the simplest path. Justice Samuel Alito, who usually sides with the administration, said the executive branch handled the matter “in a very cursory manner,” CNBC reported, though SCOTUSblog noted he also called Clement’s proposed sliding scale of process “extraordinarily unhelpful.” Justice Amy Coney Barrett asked why the government spent so much effort litigating rather than holding a hearing, SCOTUSblog said.

Not all of the conservative justices signaled doubt. Justice Clarence Thomas sounded sympathetic, SCOTUSblog said, and suggested Congress could have written notice and hearing requirements into the statute, SCOTUSblog reported. Chief Justice John Roberts said the allegations were contradicted by other records and described the mortgage forms as a routine “stack of papers,” according to SCOTUSblog. Justices Sonia Sotomayor and Elena Kagan questioned whether a paperwork error amounts to gross negligence and what the cause requirement means if an improperly fired official cannot be reinstated.

Sauer dismissed economists’ friend-of-the-court briefs as “elite opinion,” SCOTUSblog reported. CNBC noted that former Fed chairs Alan Greenspan, Ben Bernanke and Janet Yellen joined a brief opposing Cook’s removal.

Fed Chair Jerome Powell attended. CNBC said he recently disclosed a criminal investigation by the U.S. attorney’s office in Washington over the renovation of the Fed’s headquarters, which he says is tied to the central bank’s rate decisions. CNBC noted that Cook was among the governors who backed Powell’s decision to hold rates steady; Trump did not cite her stance on interest rates in moving to fire her. Cook stays on the board in the meantime, and her underlying lawsuit remains pending. A decision is expected by summer, SCOTUSblog said.