Justices Protect Fed Independence While Giving Trump Broader Firing Authority
The Supreme Court handed President Donald Trump one of the biggest expansions of presidential power in modern history Monday, ruling that presidents can fire the heads of most independent federal agencies at will.
But the court carved out one major exception: the Federal Reserve.
In a split decision, the justices allowed Federal Reserve Governor Lisa Cook to remain in her position while she continues fighting Trump’s attempt to remove her over allegations of mortgage fraud, which Cook has denied. Cook, the first Black woman to serve on the Federal Reserve Board of Governors, was nominated by President Joe Biden and confirmed by the Senate in 2022. Her 14-year term runs through 2038.
The decision means Cook can stay on the board for now as her lawsuit moves forward, but it also gives Trump sweeping authority over other independent agencies, including the Federal Trade Commission, National Labor Relations Board, Merit Systems Protection Board and Consumer Product Safety Commission.
“We hold that such protection from removal is contrary to the separation of powers enshrined in the Constitution,” Chief Justice John Roberts wrote for the court.
Court Overturns 91-Year Limit On Presidential Removal Power
The broader ruling came in the case of former Federal Trade Commission member Rebecca Slaughter, whom Trump fired without cause despite a federal law requiring a reason for removal. In siding with Trump, the court’s six conservative justices overturned the core of Humphrey’s Executor, a 1935 precedent that had limited a president’s ability to remove certain independent agency officials.
The ruling reshapes how much independence federal agencies can claim from the White House. For decades, Congress had built protections into agencies designed to regulate wide areas of American life, including labor relations, consumer safety, nuclear energy and trade.
Trump celebrated the decision on Truth Social, calling it a “Historic and Unprecedented Ruling” and “one of the most important ever given with respect to Presidential Powers.”
Justice Sonia Sotomayor, dissenting from the bench, warned that the ruling could lead to “submission, instability, and even oppression.”
“The president, to be sure, emerges with more power than ever before,” Sotomayor said. “That power was given to him by six justices on this court, not the people or the Constitution.”
Lisa Cook Case Gets A Different Standard
Cook’s case was different.
In a 5-4 ruling, Roberts joined Justice Brett Kavanaugh and the court’s three liberal justices to reject Trump’s effort to immediately remove Cook from the Fed. The court said Trump could not fire her without proper notice, a chance to respond and judicial review.
Allowing Cook to be removed immediately, Roberts wrote, “would allow the President to remove a member of the Federal Reserve at any time, for any reason, without any notice before, and without any judicial check after.”
The court did not rule on whether the allegations against Cook were true. It also did not permanently block Trump from trying again. Roberts noted that Trump could make another attempt if Cook is given notice and an opportunity to contest the charges.
Trump signaled he may do just that, writing that his administration would take “appropriate action immediately” against someone he accused of wrongdoing.
Cook has denied any misconduct and has not been charged with a crime.
Cook Says Firing Attempt Was About Political Pressure
The allegations against Cook stem from claims that she listed two properties, one in Michigan and one in Georgia, as primary residences in 2021 before she joined the Fed. Such a designation can affect mortgage rates and down payments.
Cook has said the case 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,” Cook said in a statement.
Her supporters argue Trump’s effort was part of a larger push to pressure the Federal Reserve over interest rates. If Trump were able to remove Cook and replace her with his own appointee, he could gain a majority on the Fed’s board, potentially reshaping U.S. monetary policy.
Why The Federal Reserve Exception Matters
The Federal Reserve plays a central role in setting interest rates, fighting inflation and stabilizing the economy. Because its decisions affect borrowing costs, wages, jobs, housing and financial markets, the Fed has long been structured to operate with a degree of independence from direct political control.
Justice Ketanji Brown Jackson, in a concurring opinion, rejected the Trump administration’s argument that the president was harmed by not being able to immediately remove Cook.
“The thought that the President suffers a comparable level of harm simply because he is temporarily unable to remove Cook from office is facially absurd,” Jackson wrote.
She warned that the public interest is not served “if a President can intimidate members of the Federal Reserve into doing his bidding,” adding that even the perception of partisan influence over the central bank could trigger serious economic consequences.
