Administration takes the Fed governor firing to the Supreme Court; the next FOMC meeting is in three days.

The Federal Reserve Act of 1913, as amended, provides that members of the Board of Governors of the Federal Reserve System are appointed by the President, confirmed by the Senate, and may be removed by the President for cause. The phrase for cause is, by long judicial construction, a constraint. It does not mean for any reason. It means for inefficiency, neglect of duty, or malfeasance in office, in the formulation employed by the Supreme Court in Humphrey’s Executor v. United States, decided in 1935 and not overturned.

On August 25, 2025, the President announced he was firing Lisa D. Cook from the Board of Governors. The asserted cause was a discrepancy on a mortgage application. Cook contested both the factual basis and the legal sufficiency. A federal district judge sided with Cook on September 9. A panel of the United States Court of Appeals for the District of Columbia Circuit declined to lift the lower court’s order on September 15. The administration filed an emergency application at the Supreme Court of the United States on September 18.

The Federal Open Market Committee, which is the body within the Federal Reserve that sets the target federal funds rate, meets on September 16-17 and again on October 28-29. Cook, as a Senate-confirmed governor, is a voting member of the FOMC. The administration’s filing at the Supreme Court asked, in effect, that the firing be permitted to take effect before the September meeting, so that Cook would not vote.

The September 16-17 meeting, in the event, occurred with Cook participating. The Supreme Court did not grant the emergency application before the meeting. The Fed cut interest rates by a quarter point. The vote was unanimous. The President criticized the decision afterward as too small.

The structural matter is what is being asked. The Federal Reserve has been independent of the executive branch since the Banking Act of 1935. The independence is not symbolic. It is the basis on which the global price of the dollar is set. When the holder of the executive office asks a court to permit the removal of a sitting governor on a paperwork theory the FBI is not prosecuting, days before a meeting at which that governor is scheduled to vote, the holder is asking the court to permit the executive to staff the central bank in real time around the calendar of its meetings.

The Supreme Court has, since the founding, been generally reluctant to disturb the legal architecture of central-bank independence on emergency dockets. The Court was, in this case, reluctant. The application sat. Cook voted. The dollar held its value. The court, at the time of this writing, has not ruled on the merits.

A serious country runs its central bank on the calendar of its central bank, not on the calendar of its emergency applications.

Calmly documenting the decline.