Six out of nine US Supreme Court justices have indicated support for keeping a central bank interest rate-setter in her job, in defiance of the Donald Trump administration.
The White House moved last year to remove Lisa Cook, a member of the Federal Reserve’s board, from her role, claiming she had committed mortgage fraud – a claim she has strongly denied and that has resulted in no criminal charges.
Financial markets and political commentators widely saw the move as part of the US president’s efforts to force interest rate cuts out of the central bank, in defiance of its mandate and independence.
Money latest: Nationwide reveals expansion of mortgages worth six times salary
He has previously called for the removal of Fed chair Jay Powell, who spoke out against the administration earlier this month when it emerged he himself was facing a criminal investigation.
While Ms Cook – a Biden-era appointee – is bringing her own legal case, the Supreme Court heard arguments on Wednesday over whether she could stay on while her challenge plays out.
Allowing Ms Cook’s firing to go forward “would weaken, if not shatter, the independence of the Federal Reserve”, Justice Brett Kavanaugh, one of three Trump appointees on the nation’s highest court said.
Inflation ticks up for first time in 5 months to 3.4%, ONS figures show
Britain will not be ‘buffeted around’ by Trump tariffs, says Rachel Reeves
US group Metagenics has healthy appetite for probiotics maker Symprove
At least five other justices on the nine-member panel also sounded sceptical about the effort to remove her from office, according to reporters.
No president has fired a sitting governor in the 112-year history of the Fed, which was structured to be independent of day-to-day politics.
It cut interest rates three times during 2025 as worries about a collapse in hiring later outweighed concerns about Trump trade war tariffs pushing up the pace of price increases in the world’s largest economy.
Mr Trump has demanded a pick up in the pace of rate cuts to help shore up growth.
Economists and financial markets, however, see the prospect of US rate cuts being damaged this year by already strong economic growth.
Be the first to get Breaking News
Install the Sky News app for free
Mr Powell is due to step down in May following the completion of his second term as Fed chair.
Mr Trump is due to nominate his successor but he is facing a revolt among fellow Republicans in the Senate who would be involved in rubber-stamping that appointment.
Ms Cook said after the legal arguments at the Supreme Court: “For as long as I serve at the Federal Reserve, I will uphold the principle of political independence in service to the American people.”
The justices have the option to deny the emergency appeal the Trump administration is seeking to dismiss her, allowing her case to continue in lower courts, but could make a more concrete ruling in the case.
