Trump’s Legal Efforts to Change the Fed Spark Discussion Over Boundaries of Presidential Authority

The Trump administration has asked the U.S. Supreme Court to allow the president to dismiss Federal Reserve Governor Lisa Cook, challenging previous court decisions that prevented her removal. Filed on September 18, 2025, the administration’s petition claims that, under the Federal Reserve Act, Trump has the right to fire Fed governors “for cause,” citing alleged mortgage fraud related to Cook’s past property disclosures. Solicitor General D. John Sauer argued that the president’s determination of “cause” should not be subject to review, pointing to accusations that Cook identified two separate properties as her primary residence to obtain better mortgage rates, which, they contend, makes her unfit to serve on the Fed’s board [1].

The legal battle focuses on whether presidential removal authority covers actions taken before a Fed governor’s appointment. Cook, appointed by President Joe Biden in 2022, denies any wrongdoing and has filed suit to challenge her removal, claiming Trump lacks a solid legal basis. U.S. District Judge Jia Cobb ruled in August that Trump’s attempt to fire Cook violated her due process rights and restored her position, stating that the “for cause” standard only applies to misconduct occurring during a governor’s time in office [2]. The D.C. Circuit Court of Appeals later upheld this ruling, which enabled Cook to join the Fed’s September 18 meeting, where a 25-basis-point rate reduction was approved [3].

The administration’s submission to the Supreme Court asks for these decisions to be halted, asserting that lower courts exceeded their authority by evaluating the president’s judgment of “cause.” Sauer argued that the Federal Reserve Act’s removal clause is broad, permitting removal for issues of “conduct, ability, fitness, or competence,” but not for political disagreements or without justification. Trump’s attorneys assert that Cook’s alleged inconsistent mortgage disclosures compromise her integrity as a financial overseer [1].

This legal dispute marks a crucial moment for presidential control over independent government entities. While Trump has previously ousted leaders of organizations like the National Labor Relations Board and Federal Trade Commission without showing cause, the legal protections for the Fed are unique. The Supreme Court has, in the past, expressed doubt about permitting the removal of Fed governors without specific cause, due to the central bank’s function of shielding monetary policy from political influence [2]. Observers suggest that this outcome could reshape the limits of executive power, especially over agencies intended to function autonomously [4].

Should Cook be removed, it would alter the ideological composition of the Fed. The Board of Governors is presently made up of four Biden appointees alongside three appointed by Trump. With Stephen Miran, a Trump nominee, joining the board after Senate confirmation in September, Cook’s continued service has acted as a counterweight to Trump’s economic stance. The president has criticized the Fed for its recent rate reductions, arguing that removing Cook is a move to bring the board’s direction closer to his own policy objectives [4].

The Supreme Court has yet to decide on whether to grant an emergency stay, as the administration seeks to prevent Cook from participating in upcoming Fed meetings. The broader legal contest may go beyond this individual case, setting precedents for future conflicts over the dismissal of non-elected officials in agencies that blend political and technical responsibilities [1].