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 court’s refusal to intervene marks the first time the highest court has blocked a presidential bid to dismiss a Fed official since the central bank was established in 1913, reinforcing the statutory protections that underpin the institution’s operational autonomy.
Markets reacted swiftly to the decision, with US Treasury yields falling as investors priced in a lower probability of politically driven monetary policy shifts.
The 10-year yield dipped modestly, while the 2-year yield declined more sharply, reflecting renewed confidence in the Federal Reserve’s ability to set interest rates based on economic data rather than executive pressure.
The dollar softened against a basket of major currencies, and rate-sensitive equities, including the Nasdaq, posted gains as the ruling reduced uncertainty around the policy path.
The case had raised concerns among market participants about the potential erosion of the Fed’s independence, a cornerstone of US monetary policy that has helped anchor inflation expectations for decades.