Trump this year has demanded that the Fed cut rates aggressively, berating Fed Chair Jerome Powell for his stewardship over monetary policy.
The Fed, focusing on fighting inflation, has not done so, though it is expected this week to make a cut.
The Supreme Court this year has allowed Trump to proceed with the removal of various officials serving on federal agencies that had been established by Congress as independent from direct presidential control.
But in a May order in a case involving Trump’s dismissal of two Democratic members of federal labour boards, the Supreme Court signalled that it views the Fed as distinct from other executive branch agencies.
It said the Fed “is a uniquely structured, quasi-private entity” with a singular historical tradition.
Unlike other members of regulatory boards that the Supreme Court allowed Trump to remove, Cook’s protection from at-will removal distinguished her case, Garcia wrote in Monday’s opinion.
The Trump administration, in a court filing on Thursday, had asked the DC Circuit to move quickly so that Trump could remove Cook before the Fed’s policy meeting on Tuesday and Wednesday.
Administration lawyers said that allowing the president to fire Cook would “strengthen, not diminish, the Fed’s integrity”.
Cook’s lawyers, in a filing in response, said removing Cook ahead of the meeting would impact US and foreign markets, and that the public interest in keeping her in office outweighed Trump’s efforts to take control of the Fed.
In his dissenting opinion, Katsas said there was a greater risk of harm to the Trump administration than there was to Cook in leaving her in her job while the appeal played out.
“Moreover, the board of governors no doubt is important, but that only heightens the government’s interest in ensuring that its governors are competent and capable of projecting confidence into markets,” Katsas wrote.
In blocking Cook’s removal, Cobb had found that the “best reading” of the 1913 law is that it only allows a Fed governor to be removed for misconduct while in office.
The mortgage fraud claims against Cook all relate to actions she took prior to her US Senate confirmation in 2022.
Trump and his appointee William Pulte, the Federal Housing Finance Agency director, have claimed that Cook inaccurately described three separate properties on mortgage applications, which could have allowed her to obtain lower interest rates and tax credits.
A loan estimate for an Atlanta home purchased by Cook shows that she had declared the property as a “vacation home”, according to a document reviewed by Reuters, information that would appear to undercut the allegations against her.
And the property tax authority in Ann Arbor, Michigan, said in response to a Reuters inquiry that Cook has not broken rules for tax breaks on a home there that Cook had declared her primary residence.
The finding, which came in response to a Reuters request that the city review Cook’s property records, could boost Cook’s defence against efforts by the Trump administration to remove her from the Federal Reserve board.
Trump’s Justice Department also has launched a criminal mortgage fraud probe into Cook, and has issued grand jury subpoenas out of both Georgia and Michigan, according to documents seen by Reuters and a source familiar with the matter.
