US Supreme Court blocks Trump’s attempt to remove Federal Reserve governor

The US Supreme Court has blocked an attempt by President Donald Trump to dismiss Lisa Cook from the Board of Governors of the Federal Reserve, The Wall Street Journal (WSJ) reports.

The court upheld lower-court rulings that temporarily prevented Cook’s removal, allowing her to remain in her position until the legal proceedings are concluded.

According to the report, siding with the administration would have effectively given the president broad authority to remove Federal Reserve governors without judicial scrutiny, potentially reshaping the central bank’s independence.

Federal law permits presidents to remove a member of the Federal Reserve Board only for cause. At the centre of Trump’s appeal to the Supreme Court was the question of what qualifies as “cause,” who has the authority to determine it, and what legal protections must be afforded in the process.

Trump argued that he had broad authority to dismiss Governor Lisa Cook, contending that allegations of mortgage fraud raised by Federal Housing Finance Agency Director Bill Pulte provided sufficient grounds for her removal.

The president alleged that Cook improperly listed a second home as her primary residence on a mortgage application in order to obtain more favourable loan terms, claiming the matter, at minimum, created the appearance of misconduct. The Justice Department has since launched a criminal investigation into the allegations.

Cook, who has declined to step down and has not been charged with any offence, maintains through her lawyers that the case rests on a single reference contained in a 2021 mortgage document and argues that it is being used as a pretext for a politically driven attempt to influence the Federal Reserve’s policymaking body.

By Jeyhun Aghazada