The Supreme Court has temporarily blocked President Trump's attempt to fire Federal Reserve Governor Lisa Cook, maintaining a critical firewall for now around the central bank's ability to make decisions without political interference from the White House.
That means Cook can stay in her job at least until the high court hears oral arguments in the case in January.
The decision shows that the conservative court is willing to at least consider some limits on the president's power, even as it has allowed Trump to exercise considerable authority over other nominally independent government agencies.
Critics had warned that allowing Trump to fire Cook would have trampled on decades of research showing central banks function best when they're allowed to operate without meddling from politicians.
"The Court's decision rightly allows Governor Cook to continue in her role on the Federal Reserve Board, and we look forward to further proceedings consistent with the Court's order," Cook's attorneys, Abbe Lowell and Norm Eisen, said in a statement.
Trump's efforts to influence the Fed
For months, Trump has been urging the Fed to adopt sharply lower interest rates in hopes that it would help boost economic growth while also reducing the government's own borrowing costs. That's precisely the sort of short-term pressure that the central bank is designed to be insulated from.
"Less independent central banks around the world have at times prioritized such small, short-run gains, resulting in substantial long-term harm and inferior economic performance overall," wrote a group of former Treasury Secretaries, Fed governors and prominent economists in a friend of the court brief. "Central bank independence is the solution that Congress and the President have chosen, effectively tying their hands, like Ulysses as he passed the sirens, to protect against the risk that monetary policy will be mishandled."
Frustrated that the Fed hasn't cut interest rates more aggressively, Trump moved to install more of his own hand-picked governors on the Fed's governing board. He got an early opening in August when governor Adriana Kugler stepped down, five months before her term ended. Trump replaced Kugler with White House economist Stephen Miran, who has echoed the president's call for much lower interest rates.
The push to oust Cook came after Bill Pulte, a Trump ally who serves as the head of the Federal Housing Finance Agency, accused the Fed governor of making false statements on a mortgage application. Cook has denied any wrongdoing.
The Supreme Court has allowed Trump to remove officials from other agencies such as the Federal Trade Commission and the National Labor Relations Board, despite a longstanding precedent to prevent such meddling. But justices put the Federal Reserve in a special category.
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