NextFin news, On Friday, September 19, 2025, former President Donald Trump escalated his legal fight by asking the U.S. Supreme Court to allow him to remove Federal Reserve Governor Lisa Cook from her position. Trump’s petition challenges lower court rulings that blocked his attempt to fire Cook, who he accuses of mortgage fraud.
Trump moved to fire Cook on August 25, 2025, following a criminal referral letter sent to the Department of Justice on August 15 by Bill Pulte, director of the Federal Housing Finance Agency. The referral alleges that Cook fraudulently claimed homes in two states as her primary residence to obtain favorable mortgage terms and received rental income on one of the properties. These transactions occurred before Cook became a Fed governor.
In his 41-page Supreme Court filing, Solicitor General D. John Sauer argued that the President has unreviewable discretion to remove a Federal Reserve governor "for cause," which includes any reason related to the officer's conduct, ability, fitness, or competence. Sauer criticized lower courts for "improper judicial interference with the President’s removal authority."
The legal dispute also involves questions about Cook’s Fifth Amendment due process rights. A U.S. District Judge granted a temporary restraining order on September 9, 2025, allowing Cook to remain in office, citing likely violations of procedural rights when Trump announced the firing on social media without direct notice to Cook. A federal appeals court upheld this ruling on September 15, 2025, stating Cook must be given meaningful notice and an opportunity to respond before removal.
Cook’s legal team contends that pre-office conduct does not constitute valid cause for removal and notes that Cook has never been formally charged with wrongdoing. They also reference a recent Supreme Court ruling describing the Federal Reserve as a "uniquely structured, quasi-private entity" that enjoys statutory protections against at-will removal of its members.
Despite the ongoing legal battle, Cook participated in the Federal Reserve’s monetary policy meeting on September 16-17, 2025, where the central bank lowered interest rates by 0.25%. Cook voted in favor of the rate cut, while a recent Trump appointee dissented.
The Supreme Court’s decision on this matter could have significant implications for the limits of executive power over the Federal Reserve and the stability of the U.S. central banking system.
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