SCOTUS punts Fed independence question to future courts

In a five-to-four decision, the Supreme Court ruled this week that President Trump cannot fire Lisa Cook from her position as a Federal Reserve governor. But the ruling avoided spelling out what actually constitutes grounds for removing a Fed governor. The court rejected Trump's argument that he could fire her over mere concerns about her integrity, and also rejected Cook's argument that firing requires proof of gross misconduct. Instead, as Axios reports, the court essentially punted the problem: it said Cook deserves an explanation and a chance to respond before being removed, but declined to clarify what level of cause is actually required. This ambiguity could allow a president to circumvent Fed independence by finding technical pretexts—filing the paperwork correctly even if the underlying reasons are purely political. The deeper problem, the court suggested, lies with Congress, which established the Federal Reserve but never clearly defined what grounds warrant removing a governor.

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