The US Supreme Court has rejected President Donald Trump’s attempt to remove Federal Reserve Governor Lisa Cook from her post, delivering a decisive legal setback to the White House’s effort to assert direct control over the central bank.
The high court’s decision preserves Cook’s seat on the Federal Open Market Committee, maintaining the balance of voting members and shielding the Fed’s current policy trajectory from immediate political disruption.
In a separate ruling, the court upheld the dismissal of a Federal Trade Commission member, highlighting a nuanced judicial approach to executive authority across different regulatory bodies.
However, the Fed decision stands as the more significant outcome for financial markets, which have been closely watching for signs of institutional erosion.
The ruling reinforces the legal framework protecting central bank independence, a cornerstone of US monetary policy credibility.
Markets had grown increasingly sensitive to the prospect of political interference in interest rate decisions, with concerns that removing a governor could shift the Fed’s stance or undermine its non-partisan mandate.