Supreme Court says Trump can't fire Fed governor Lisa Cook

The Supreme Court ruled Monday that President Trump could not immediately remove Federal Reserve governor Lisa Cook, a blockbuster ruling that limits the president's influence on the central bank.

Why it matters: The decision is the highest court's strongest endorsement yet of Federal Reserve independence, making it harder for Trump and future administrations to reshape the central bank through presidential firings.

What they're saying: "We see no reason to leave the public in limbo, or to sow doubt as to the status of one of our Nation's (and the world's) most important financial institutions," Chief Justice John Roberts wrote.

"Although we appreciate that others may see matters differently, we would not so quickly unsettle this 'special arrangement sanctioned by history.'"

Yes, but: Even with Roberts' sweeping defense of the Fed's independence, the ruling was narrow in one key respect.

Roberts said the administration failed to follow the required process before removing Cook, leaving open the possibility that the president could try again after giving Cook notice, a chance to respond and a factual basis that courts can review.

"To be clear, the ultimate question of whether the President can remove Cook for cause will depend in part on the underlying facts," Roberts wrote.

Flashback: Trump said last year that he was firing Cook for cause, citing mortgage applications from before she was a Fed governor.

Trump said the documents show fraud for claiming two separate homes as a primary residence, a claim that has not been affirmed by lower courts.

Cook, the first Black woman to serve on the Fed board, was appointed to a 14-year term by former President Biden in 2022.

The intrigue: "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," Cook said in a Monday statement.

"Today's ruling affirms a principle that has underpinned sound economic stewardship for generations: that the Federal Reserve must make all its policy decisions guided by evidence and independent judgment, free from political interference," Cook said.

The other side: "As I have repeatedly said, I believe Lisa Cook will be indicted for mortgage fraud," Bill Pulte, the housing regulator who has repeatedly accused Cook of mortgage fraud and urged her removal, wrote on X m Monday after the Supreme Court decision.

Between the lines: Fed governors are appointed to lengthy terms to insulate one of the world's most influential economic bodies from political influence.

But the Federal Reserve Act allows the president to fire a governor for cause, though none except Trump has ever attempted to do so.

What to watch: Trump's attempt to fire Cook last year came months before former Fed chair Jerome Powell said the Department of Justice had launched a criminal investigation into his conduct.

The Department of Justice said in April that it planned to drop that criminal probe, a sharp reversal that opened the path for Trump's Fed pick Kevin Warsh to be confirmed to lead the central bank.

But Powell is remaining on the Fed Board of Governors — his term as a governor expires in January 2028 — calling out what he sees as an ongoing threat by the Trump administration to reopen a criminal investigation over the Fed's building renovations.

Editor's note: This story has been updated with comment from Cook and Pulte.