Trump v. Cook and the Future of the Federal Reserve’s Independence

In what will either clarify or redefine the boundaries of presidential power, the Supreme Court has granted certiorari and scheduled oral arguments in Trump v. Cook, a case which asks whether President Donald Trump has the authority to fire Lisa Cook, a sitting member of the Federal Reserve Board of Governors (Fed). The Fed is the independent executive agency in charge of monetary policy in the United States. This case marks a cumulation of months of tension, standoff, and confrontation between the Fed and President Trump, fueled by disagreements over interest rates, which the seven governors of the Fed are in charge of setting every fiscal quarter. Interest rates have far-reaching impacts on the domestic and international economy, which is precisely why Congress delegated power over determining interest rates to an independent, nonpartisan executive agency through the Federal Reserve Act of 1913.

An ambiguous phrase in the Federal Reserve Act — that members of the Fed Board of Governors can be “removed for cause by the President” — is the central legal issue in Trump v. Cook. President Trump asserts that Lisa Cook’s alleged misrepresentations on mortgage applications gives him a sufficient “cause” to remove her. Indeed, the Federal Housing Finance Agency did accuse Cook of mortgage fraud, leading the Justice Department to launch an investigation into her in September. Furthermore, President Trump argues that his authority to unilaterally remove officials from the executive branch, which the Roberts Court has greatly expanded in recent years through decisions such as Seila Law LLC v. Consumer Financial Protection Bureau (2020) and Collins v. Yellen (2021), grant him broad discretion to define “cause” without being subject to judicial review.

Humphrey’s Executor v. United States, a 1935 case that provides the precedent that restricts the president from removing officials of an independent executive agency that is quasi-legislative or quasi-judicial in nature,

Cook argues that, even if she had misrepresented her mortgage application, the misconduct occurred before taking office. Moreover, the wrongdoing is not relevant to her responsibilities as a Fed governor. Because of this, Cook believes that President Trump acted outside his authority in removing her, and warns that granting a president broad discretion to define “cause” would make the standard meaningless and set a precedent for future presidents to remove a Fed governor based on policy disagreements. This is contrary to the Fed’s purpose to manage the economy independent from short-term political pressures.

Lower courts agreed with Cook’s argument. First, on September 9th, U.S. District Judge Jia Cobb of the District of Columbia issued a preliminary injunction, temporarily blocking President Trump’s removal of Cook. Judge Cobb agreed with Cook that “for cause” does not “contemplate removing an individual purely for conduct that occurred before they began in office.” President Trump appealed the decision to the U.S. Court of Appeals for the D.C. Circuit, but a divided three-judge panel rejected his request to stay the injunction, affirming Judge Cobb’s holding 2-1. Days later, on September 18th, President Trump asked the Supreme Court to reverse the appellate court’s ruling. However, unlike many emergency docket requests by the Trump administration this year, the Supreme Court, in an unsigned and unexplained order, declined to immediately block the lower court ruling on October 1st, allowing Cook to remain in her position for now, pending oral arguments in January 2026.

So for the time being, Trump v. Cook hangs in a balance. The Supreme Court’s decision not to rule immediately on the case, as they have done often this year in a process that is now commonly called the “shadow docket,” came as a relief to many. Even so, the Supreme Court has not been shy in expanding presidential power. And to many, recent cases such as Consumer Financial Protection Bureau and Yellen indicate that the Roberts Court is poised to overturn Humphrey’s Executor v. United States (1935), the precedent that restricts the president’s ability to, without cause, remove officials from independent executive agencies that are quasi-legislative or quasi-judicial in nature. Even so, it is important to note that even conservatives on the Roberts Court have acknowledged that the Fed may be subject to special privileges compared to other independent executive agencies. The most recent indication of this came in Trump v. Wilcox (2025), a case about Trump’s removal of a member of the National Labor Relations Board without cause, in which the Court called the Fed “a uniquely structured, quasi-private entity that follows…distinct historical tradition.”

But ultimately, if the Supreme Court does side with Trump, the greatest impact will not be constitutional, but economic. Simply put, allowing President Trump to remove Cook would surely compromise the Fed’s independence, subjecting monetary policy to political tides. And history offers a clear verdict on where that leads — it is not good.