The US Supreme Court blocked Trump from firing a member of the Federal Reserve Board

The US Supreme Court ruled on Monday (June 29th) by a 5-4 vote to deny President Trump's request to remove Federal Reserve Governor Lisa Cook, maintaining the independence of the Federal Reserve.

This is the first time that a US president has attempted to remove a member of the Federal Reserve Board since the Federal Reserve System was established by the US Congress in 1913.

Reuters reported that in August last year, Trump attempted to replace Cook on the grounds of unsubstantiated mortgage fraud allegations. Cook denied the accusations and stated that they were merely pretexts; the real reason was the disagreement between the two parties on monetary policy.

The Supreme Court has rejected the request made by the Department of Justice and upheld the order issued by the lower court, which prohibited Trump from immediately firing Cook. The related lawsuit will continue to be heard.

The US Federal Reserve Act stipulates that the president can only remove a Fed governor if there is a "valid reason" (for cause), but the law does not define the relevant criteria. The Trump administration argues that as long as the president provides a reason, the courts have no right to review it; Cook, however, believes that this would undermine the independence of the Fed, disrupt the market, and have implications for the future.

After returning to the White House, Trump continued to pressure the Federal Reserve to accelerate interest rate cuts and even attempted to replace Cook and investigate then-Fed Chairman Powell, which drew attention to the independence of the central bank. This latest Supreme Court ruling also shows that the justices view the Federal Reserve as an independent institution distinct from other federal agencies.

This is the second time this year that the Supreme Court has ruled against Trump's key economic policies. In February, the Supreme Court ruled that Trump's decision to impose comprehensive tariffs on almost all trading partners in accordance with a 1977 law was illegal. Trump then publicly criticized the ruling.