NextFin news, WASHINGTON — On Thursday, September 18, 2025, the Trump administration formally asked the U.S. Supreme Court to allow President Donald Trump to fire Lisa Cook, a member of the Federal Reserve Board of Governors. This unprecedented move challenges the independence of the Federal Reserve and could significantly expand presidential control over the central bank.
The administration's appeal seeks to overturn a preliminary injunction issued by U.S. District Judge Jia M. Cobb, who blocked Cook's removal. Judge Cobb ruled that the Federal Reserve Act's "for cause" removal provision limits firing to misconduct occurring during office tenure and requires due process, which Cook had not been afforded. The U.S. Court of Appeals for the District of Columbia Circuit upheld this injunction in a 2-1 decision, with Judge Gregory G. Katsas dissenting.
Solicitor General D. John Sauer, representing the administration, argued in a 41-page appeal that the lower courts improperly interfered with the President's authority to remove Federal Reserve governors for cause. The administration contends that Cook has no legal right to challenge her firing.
The dispute centers on allegations made by Bill Pulte, director of the Federal Housing Finance Agency under Trump, who accused Cook of mortgage fraud related to two housing loans taken in 2021. Pulte claimed Cook falsely declared both properties as primary residences to secure favorable interest rates. Cook's attorneys deny wrongdoing, noting she informed lenders that one property was a vacation home.
President Trump publicly demanded Cook's resignation in late August 2025 and sent her a letter on August 25 stating he had determined sufficient cause for removal. Cook responded by filing a lawsuit challenging the firing, asserting the allegations do not meet the legal standard for cause and that she was denied a hearing.
The Federal Reserve Board, established by the Federal Reserve Act of 1913, is designed to operate with political independence. Its seven governors serve staggered 14-year terms and can only be removed "for cause" by the president, though the law does not define "cause." Cook was appointed by President Biden to a full term in 2023.
The case is one of several before the Supreme Court testing the scope of presidential authority over economic and federal regulatory matters. A related case scheduled for November will address the president's power to impose import tariffs.
Trump's administration has expressed frustration with the Federal Reserve's policies, particularly its maintenance of high interest rates to combat inflation. Trump has also threatened to remove Federal Reserve Chairman Jerome Powell, whom he appointed in 2018.
If the Supreme Court sides with Trump, it could set a precedent allowing the president broader power to reshape the Federal Reserve Board by removing members for reasons beyond traditional misconduct, potentially impacting U.S. monetary policy and economic governance.
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