Supreme Court rules Lisa Cook can stay at the Fed while Trump’s firing attempt plays out

The Supreme Court just told the president he can’t fire a Federal Reserve governor. At least not yet.

In a 5-4 decision delivered on June 29, 2026, the Court ruled that Fed Governor Lisa Cook can remain in her position while her lawsuit against President Trump’s attempted removal moves through the courts. Chief Justice Roberts delivered the opinion, which sidesteps the larger constitutional question of whether a president has the authority to dismiss a sitting Fed governor at will. But the immediate effect is clear: Cook stays.

The ruling caps a nearly year-long legal battle that began when Trump moved to oust Cook in August 2025, citing allegations of mortgage fraud from before her appointment to the Board. Cook fired back with a lawsuit arguing that her removal violated the Federal Reserve Act, which requires “for cause” justification to dismiss a governor.

How we got here

Lisa Cook was sworn in as a Fed Governor on May 23, 2022, making history as the first Black woman to serve on the Federal Reserve Board.

Trump’s attempt to remove Cook in August 2025 marked an unprecedented move. No sitting president had ever tried to fire a Federal Reserve governor before. The allegations of mortgage fraud that the administration cited as justification remain unproven.

Cook challenged the firing in court, and a D.C. District Court sided with her in September 2025, issuing a preliminary injunction that blocked the removal. The case climbed the judicial ladder from there, eventually landing at the Supreme Court for the question of whether Cook could continue serving while the litigation played out.

The independence question

The Federal Reserve Act includes a “for cause” removal standard, designed specifically to insulate the central bank from political interference. A president who disagrees with a rate hike shouldn’t be able to simply swap out the people making that call.

The 5-4 margin tells its own story. Four justices were prepared to let the removal proceed. The Supreme Court deliberately avoided ruling on the substantive question, meaning the constitutional question of whether a president can remove a Fed governor remains unresolved.

What this means for investors

Markets noticed. Risk assets showed a positive reaction to the ruling.

Investors should be watching two things. First, any signals from the lower courts as the Cook case proceeds on the merits. A ruling that affirms broad presidential removal power would fundamentally reshape how markets think about Fed independence. Second, the composition of the Fed Board itself, which has seven members.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.