Supreme Court Blocks Trump Firing of Fed Governor Lisa Cook

The Supreme Court ruled 5-4 on Monday that President Donald Trump cannot fire Federal Reserve Governor Lisa Cook, handing the central bank a reprieve in a yearlong legal fight over its independence. Chief Justice John Roberts, writing for the majority, said the administration had stripped Cook of the procedural protections she was owed under federal law when Trump fired her over alleged mortgage fraud in August 2025. The decision lets Cook remain in her job while her lawsuit challenging the firing moves forward in federal court. The ruling was issued on June 29, 2026.

The Court Stops a First-of-Its-Kind Firing

The case, Trump v. Cook, is the first Fed governor firing attempt in the institution’s 112-year history. By a 5-4 vote, the court ruled in favor of Cook.

Justice Clarence Thomas, who called the ruling “incorrect,” filed a dissent; Justice Samuel Alito, joined by Justice Neil Gorsuch, filed a separate dissent; and Justice Amy Coney Barrett filed her own. Kavanaugh and Jackson each filed concurring opinions. The majority rejected the Trump administration’s emergency application to lift an order that has kept Cook in her seat since September 2025. The vote, and the unusual lineup of Kavanaugh and Jackson on the same side, shows how the legal questions around central bank independence have crossed conventional ideological lines.

Chief Justice John Roberts wrote the line in the 26-page majority opinion released June 29, 2026, in explaining why the court refused to lift the lower court’s injunction.

Acceptance of the Government’s position would in effect transform the Federal Reserve’s for-cause protection into at-will employment, an interpretive leap out of step with the statute Congress enacted and our Nation’s tradition of central banking protected from political interference.

Roberts Writes Fed Independence Into the Statute

Congress built the Federal Reserve differently from most other federal agencies. The Federal Reserve Act allows a president to remove a governor only “for cause.” Board members are appointed to staggered 14-year terms. The central bank funds itself through interest on the securities it owns, rather than through the normal congressional appropriations process. Roberts leaned on that design in his opinion, writing that “Not only the fact of independence but also the appearance of independence is key to the Federal Reserve’s design.”

The full text is available in the 26-page majority opinion in Trump v. Cook. Roberts was explicit that the court had “not addressed the facts, as they have yet to be found or analyzed under the relevant legal standards,” and Kavanaugh made a similar point at the January 21, 2026 oral argument, telling the government’s lawyer that the administration’s position “would weaken, if not shatter, the independence of the Federal Reserve.”

The Mortgage Allegation Survives the Ruling

The Supreme Court did not declare Cook innocent. Roberts, in a footnote, said the ruling does not bar Trump from trying again to remove Cook over the mortgage allegations if he provides proper process. A new attempt would have to include a written explanation of the evidence, a way for Cook to respond, and a deadline for that response, Roberts wrote. Roberts was explicit that the court had “not addressed the facts, as they have yet to be found or analyzed under the relevant legal standards.”

The allegations trace to Federal Housing Finance Agency Director Bill Pulte, who on August 15, 2025 accused Cook of claiming two different homes as her primary residence in 2021, before she joined the Fed, to obtain better loan terms. Pulte referred the matter to the Department of Justice. Cook rejected the demand when Trump called for her resignation on Truth Social on August 20, calling the allegations “flimsy,” “unproven,” and “conveniently timed.”

This was never about mortgage documents signed years before I became a Federal Reserve governor. It was an attempt to remove me on a manufactured pretext because I refused to bow to political pressure and continued to set interest rates based only on what would best serve the American people.

Federal Reserve Governor Lisa Cook said this in a written statement released after the ruling. A Reuters review of loan and security-clearance forms reported that the documents “appear to undercut fraud claims.” The Washington Post and the Financial Times reached similar conclusions independently. The Post noted that “Cook’s financial disclosure forms indicate she has a loan against a property in Atlanta with an interest rate of 3.25 percent, which was slightly higher than prevailing rates for a primary residence at the time she took on the mortgage.” Cook’s national security clearance form declared the Atlanta property as a “2nd home.”

The case now returns to the U.S. District Court for the District of Columbia, where Judge Jia Cobb issued the original preliminary injunction on September 9, 2025. Cook’s lawsuit will proceed there on the merits, with no Supreme Court deadline on the calendar.

Across the Hall, the Court Hands Trump a Win at the FTC

The same day, in a separate 6-3 decision, the court ruled that Trump can fire members of independent agencies such as the Federal Trade Commission at will. Roberts wrote that opinion as well. The ruling overturned Humphrey’s Executor, a 1935 precedent that had protected independent-agency members from removal without good cause, and grew out of Trump’s March 2025 firing of FTC Commissioner Rebecca Slaughter.

The FTC, National Labor Relations Board, Merit Systems Protection Board, and Consumer Product Safety Commission are now far more vulnerable to shifts in administration priorities. The Federal Reserve is not. Cook’s lawyer, Abbe Lowell, told PBS NewsHour the same court “made very clear to this president and to every president that comes after that this is a unique agency.” The two rulings, read together, treat the central bank differently from every other independent agency.

The Slaughter decision’s reasoning covers other agencies with similar structures, including the SEC and the Federal Communications Commission. The Cook decision, by contrast, treats the Federal Reserve as a constitutionally distinctive institution.

Why a President Tried to Fire a Governor

The legal battle began on August 15, 2025, when Pulte made the mortgage fraud allegations public. Trump called for Cook’s resignation on Truth Social on August 20, and on August 25 announced that he had fired her. Cook refused to leave and sued within days. The case has since moved through every level of the federal judiciary. Each step has reinforced the central bank’s standing as a constitutionally distinctive institution.

1. August 15, 2025: FHFA Director Bill Pulte accuses Cook of mortgage fraud and refers the matter to DOJ.
2. August 20, 2025: Trump calls for Cook’s resignation on Truth Social; she refuses.
3. August 25, 2025: Trump fires Cook via a social media letter; Cook files suit within days.
4. September 9, 2025: U.S. District Judge Jia Cobb issues a preliminary injunction blocking removal.
5. September 15, 2025: D.C. Circuit Court of Appeals denies the administration’s emergency appeal in a 2-1 decision.
6. October 1, 2025: Supreme Court denies the administration’s emergency appeal and schedules oral argument.
7. January 21, 2026: Supreme Court hears oral argument in Trump v. Cook (No. 25A312).
8. June 29, 2026: Supreme Court rules Cook can remain in office while litigation continues.

The Fed is independent by design. The staggered 14-year terms and for-cause removal are meant to prevent any one president from “stacking the deck” with his own nominees. Cook was nominated by President Joe Biden in 2021 and confirmed in May 2022, becoming the first Black woman to serve on the Federal Reserve Board.

She has consistently voted with Chair Jerome Powell on policy decisions. A September 2, 2025 open letter signed by 593 economists and several Nobel laureates defended Fed independence and warned that firing Cook would erode trust in “one of America’s most important institutions.” An amicus brief filed on September 25, 2025 in support of Cook was signed by former Federal Reserve Chairs Alan Greenspan, Ben Bernanke, and Janet Yellen; former Treasury Secretaries Robert Rubin, Lawrence Summers, Henry Paulson, Timothy Geithner, and Jack Lew; former Council of Economic Advisers chairs including Glenn Hubbard, Greg Mankiw, Christina Romer, Jason Furman, Cecilia Rouse, and Jared Bernstein; and economists John Cochrane and Kenneth Rogoff. Former U.S. Solicitor General Paul Clement represented Cook at the Supreme Court; Solicitor General D. John Sauer argued for the administration.

Cook remained in office and participated in the Fed’s September 16-17, 2025 policy meeting. The central bank cut its benchmark rate by 0.25 percentage points to a target range of 4 to 4.25 percent, the first cut in nine months.

Trump has spent his second term pressing publicly for lower interest rates, and the Fed has cut rates twice since January 2025. The Fed cut again on December 10, 2025, lowering the target range to 3.5 to 3.75 percent. By June 2026, the Fed’s own projections were pointing toward a rate hike this year, a sharp reversal from the cuts Trump has been demanding.

The Rate Path Trump Has Been Trying to Bend

Cook remained in office and participated in the Fed’s September 16-17, 2025 policy meeting, where the central bank cut its benchmark rate by 0.25 percentage points to a target range of 4 to 4.25 percent, the first cut in nine months. The full text of that decision is in the Fed’s September 2025 FOMC statement. The Fed cut again on December 10, 2025, lowering the target range to 3.5 to 3.75 percent, as detailed in the Fed’s December 2025 FOMC statement. By June 2026, the central bank was no longer cutting.

The PCE inflation report for May 2026, released in late June, showed annual headline inflation at 4.1 percent, the highest since April 2023. Core PCE ran at 3.4 percent, the highest since October 2023, with energy prices tied to the Iran war leading the surge and tariff effects feeding through.

• 4.1 percent: annual PCE inflation, May 2026, highest since April 2023
• 3.4 percent: annual core PCE, May 2026, highest since October 2023
• 4 to 4.25 percent: federal funds target range after September 2025 cut
• 3.5 to 3.75 percent: federal funds target range after December 2025 cut
• 4.25 to 4.50 percent: Bank of America’s projected range after three 2026 hikes

At its June 2026 meeting, under new Chair Kevin Warsh, the FOMC changed its post-meeting statement to say it would “deliver price stability.” The committee removed a previously indicated 2026 rate cut from its projections and indicated a likelihood of a hike. Fed officials raised their 2026 inflation forecast to 3.6 percent headline and 3.3 percent core, up from 2.7 percent for both in March. Bank of America on June 23, 2026 forecast three rate hikes in September, October, and December 2026, lifting the federal funds target range to 4.25 to 4.50 percent, as detailed in Bank of America’s June 2026 forecast of three Fed rate hikes. That is the opposite of what Trump has spent the year demanding on Truth Social, and the context for that demand is the subject of Trump’s Truth Social demand for rate cuts after 4.3 percent GDP growth.

After the Cook ruling on Monday, Trump wrote on Truth Social that the case was decided “on a strictly procedural basis.” He added that “We will take appropriate action immediately to make sure that someone who has committed wrongdoing will not be making vital decisions concerning the Welfare of the United States of America.” The Fed’s next policy decision is scheduled for September 2026, the same month Bank of America has forecast the first of its three projected rate hikes.

Frequently Asked Questions

What did the Supreme Court decide in Trump v. Cook?

The Court ruled 5-4 on June 29, 2026 that the federal government’s request to lift the injunction blocking Cook’s removal is denied. Cook can remain in office while her lawsuit continues in the U.S. District Court for the District of Columbia, with the decision authored by Chief Justice John Roberts and joined by Justices Sotomayor, Kagan, Kavanaugh, and Jackson.

Why did the Court reject Trump’s bid to fire Lisa Cook?

Chief Justice Roberts, writing for the majority, said the administration stripped Cook of the procedural protections she was owed under federal law before firing her. Trump posted the firing letter on social media without giving Cook notice, a chance to respond, or a deadline to reply. Roberts wrote that the procedural failure was enough to decide the case, leaving the underlying facts to the lower courts. Roberts emphasized that the Federal Reserve’s independence is the reason courts must review “for cause” removals.

Is the mortgage fraud case against Lisa Cook closed?

No. The Supreme Court ruled only that the firing failed on due-process grounds. The underlying allegations from FHFA Director Bill Pulte, that Cook claimed two homes as primary residences in 2021, remain live. Cook has denied the allegations as a “manufactured pretext.”

How does the FTC ruling affect the Federal Reserve?

The 6-3 Slaughter decision issued the same day lets the president fire members of agencies such as the FTC at will, overturning the 1935 Humphrey’s Executor precedent. The Cook decision explicitly carved the Federal Reserve out, treating it as a constitutionally distinctive institution whose “for cause” protection stands. The two rulings leave the FTC, NLRB, and similar bodies exposed, while the central bank retains its statutory shield.

Will the Fed raise interest rates in 2026?

Bank of America on June 23, 2026 forecast three 25-basis-point hikes in September, October, and December 2026, lifting the federal funds target range to 4.25 to 4.50 percent. The PCE inflation report for May 2026 showed annual headline inflation at 4.1 percent, its highest level since April 2023. The Fed’s own June 2026 projections also indicate a hike, a sharp reversal from the cuts Trump has been demanding since January 2025.