The US Supreme Court was presented in Washington, DC on March 17, 2025.
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According to Wall Street economists and analysts, President Donald Trump’s unprecedented attempt to fire Federal Reserve Governor Lisa Cook will likely fall into the hands of the Supreme Court.
Trump on Monday evening claimed that he was claiming the fire was “for a cause” and that she made a false statement about her mortgage application.
It is the first time the president has tried to fire the Fed governor since Congress established the central bank in 1913, Evercore ISI told clients in a memo Tuesday.
“I think we can go either way, but our guess is that Scotus will support this move,” Wolf research director Tobin Marcus told clients Tuesday. “Because the legal protections for the Fed Chairman and the non-chair governor are the same, Scotts’ ratification of this move sharply erodes the Fed’s independence and raises clear concerns, even attempting to fire cooks.”
Not for the cause or for the cause
Cook said he would not leave her post, claiming that Trump had nothing under the laws that fired her. Cook’s attorney Abbe Lowell said Tuesday that he would “sue a lawsuit challenging this illegal activity.”
The case will likely end up passing through court and before the Supreme Court, Raymond James Washington policy analyst Ed Mills told clients Monday. This states that the Federal Reserve Act gives the president the power to fire the governor of the board “for a cause,” but what this means remains accurately vague in the law, Mills said.
File photo: Candidate Lisa Dennel Cook, a member of the Federal Reserve System’s Governor’s Committee, testifies at a Senate Bank Nomination Hearing on June 21, 2023 in Washington, D.C.
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“A suspected mortgage fraud occurred before Cook became governor, and protections are often thought to be limited to causes that occur during his inauguration,” JP Morgan’s chief US economist Michael Ferroli told his client on Monday, but said “for the cause.”
Trump’s path to a majority
In the near future, Cook will seek an injunction against Trump’s move, and the District of Columbia US District Court will grant her that, Marcus said. Analysts said this would keep the Fed’s status quo until the Supreme Court gets heavy.
If Trump went his way and was forced to cook before the end of that year before voting for regional president in January to TD Cowen’s policy analyst Jaret Seiberg, he would be on the path of winning a majority on the Fed’s board before voting for regional president in January.
Trump’s chef will be replaced by Vice-Chairman Michelle Bowman, appointees who will be awarded Vice-Chair Governor Chris Waller, and candidate Stephen Milan, who is expected to fill the vacancy left by Adriana Kugler after resigning earlier this month.
“This is important as the president’s majority may be able to reject picks from the reserve bank in favor of picks that support low fees,” Seiberg said. “This will face a hurdle, but if it works, it will give Trump more influence on the FOMC and interest rates.”
