Supreme Court Refuses to Let Trump Immediately Oust Fed's Cook

The US Supreme Court refused to allow President Donald Trump to immediately oust Federal Reserve Governor Lisa Cook while she sues to keep her job, dealing a setback to his efforts to exert more control over the central bank.

The order issued Wednesday means Cook can remain in her position at least until the justices rule after hearing arguments in the case in January. The economist has remained on the job since late August, when Trump said he would remove her over mortgage fraud allegations that she’s denied.

The court said that it is deferring action on the Trump’s bid to remove Cook while the Justice Department appeals a lower court ruling that said she was likely to win her lawsuit over the firing. No justice noted a dissent from the order.

The Supreme Court has largely sided with Trump this year in cases challenging his firings of officials at different federal agencies. Cook’s case is especially high stakes, since the Fed’s independence from the White House has been historically seen as critical to its role in maintaining economic stability.

The Fed, which has its own legal office separate from the Justice Department, hasn’t taken a side in the fight, telling judges it will respect whatever ruling comes down. The Fed is set to meet next on Oct. 28-29 and vote on whether to further lower interest rates.

The court fight over Cook’s position on the Fed unfolded rapidly ahead of its most recent policy meeting on Sept. 16-17. Lower courts allowed Cook to participate and the board voted to lower interest rates by a quarter percentage point. Following the meeting, the Justice Department asked the Supreme Court to intervene.

The potential for Trump to rapidly remake the Fed is why a group of former Fed and Treasury officials who served under Republican and Democratic administrations recently appealed to justices in a friend-of-the-court brief, urging the the court to leave Cook in place. They pointed to a sizable body of research showing countries with independent central banks had consistently better economic outcomes.