Supreme Court Blocks Trump From Removing Fed Gov. Lisa Cook for Now

The Supreme Court has ruled that Lisa Cook can remain on the Federal Reserve Board of Governors at least through January, when the court will hear oral arguments on President Donald Trump's attempt to fire the Biden appointee.

The decision on Wednesday means that Cook will participate in the Federal Open Market Committee (FOMC) votes on interest rate policy in October and December, denying Trump an opportunity to appoint a replacement to the 12-member panel before the end of the year.

Trump in August attempted to fire Cook over allegations that she committed mortgage fraud by claiming two separate properties as her primary residence. Cook challenged the move by claiming she wasn't granted due process, and arguing that the allegations didn't constitute sufficient cause for removal.

A lower court judge temporarily blocked Cook's removal, writing that Cook was "substantially likely" to succeed in her argument that Trump violated the Federal Reserve Act in firing her. An appeals court upheld that ruling, leading the White House to ask the Supreme Court to intervene.

The Supreme Court's terse order on Wednesday refrained from commenting on the case, saying merely that the White House's request is "deferred pending oral argument in January 2026," without setting a specific date for the hearing.

Following the ruling, White House spokesman Kush Desai told Realtor.com® in a statement that Trump "lawfully removed Lisa Cook for cause from the Federal Reserve Board of Governors.

"We look forward to ultimate victory after presenting our oral arguments before the Supreme Court in January," he added.

Still, the decision comes as a major blow for Trump, who has pursued a wide range of tactics to pressure Fed Chair Jerome Powell and the rest of the FOMC to drastically lower the Fed's benchmark interest rate.

In September, the Fed policymakers on the FOMC voted 11-1 to cut the overnight rate by a quarter percentage point, the first rate reduction in nine months.

Recent Trump appointee Stephen Miran was the lone dissenter, calling instead for a larger half-point rate cut, a position in tune with Trump's desire for easy money. Miran later explained that he believes the Fed's rate should currently be around 2%, much lower than the current range of 4% to 4.25%.

Miran signaled that he plans to vote for half-point rate cuts at the next FOMC meetings in October and December. However, he may not find support from other members, particularly with Cook in place and Trump unable to appoint another ally.

Financial markets currently estimate a 99% chance that the Fed will cut a quarter point this month, with an 86% probability of another quarter-point cut in December, according to the CME Group's FedWatch tool.

The government shutdown will introduce a new wrinkle for Fed policymakers, as regular reports on inflation and employment that they rely on to set policy have been suspended until the government reopens.

Although the Fed doesn't set mortgage rates directly, investor expectations about future Fed policy and economic conditions can influence mortgage rates.

Mortgage rates fell to an 11-month low of 6.26% ahead of the Fed decision in mid-September, but have since ticked back higher to 6.3%, according to Freddie Mac.