WASHINGTON – The Supreme Court said President Donald Trump must allow Lisa Cook to remain on the Federal Reserve for now, rejecting his bid to immediately fire her from the central bank, which has broad influence over the economy through its interest rate decisions.

Rather than grant Trump’s emergency request for her to be fired, the high court on Oct. 1 said it would hear oral arguments on the issue in January.

The justices are already set to consider a similar case on the Federal Trade Commission, which raises the issue of whether Congress or the courts can protect leaders of independent agencies from removal by the president.

The FTC case is set to be argued in December.

In the Federal Reserve dispute, Trump on Sept. 18 asked the high court to pause a federal judge’s ruling that blocked Trump from firing Cook, who was appointed to the board by his Democratic predecessor and is the first Black woman to serve as a Fed governor.

The justices have been criticized for making major decisions like that on an expedited basis, without full briefings that include oral arguments.

Cook’s attorneys previously told the high court removing her would risk "shock waves in the financial markets that could not easily be undone."

“The Court’s decision rightly allows Governor Cook to continue in her role on the Federal Reserve Board, and we look forward to further proceedings consistent with the Court’s order," Cook's lawyers Abbe Lowell and Norm Eisen said in a statement after the court's announcement.

White House press secretary Karoline Leavitt said Trump acted "well within the president's legal authority."

"We look forward to that case being fully played out at the Supreme Court," Leavitt told reporters.

Trump testing limits of presidential power

Trump has been probing the limits of his executive power, including over agencies designed to be insulated from political influence.

In May, the Supreme Court − which has a 6-3 conservative supermajority − said Trump could fire without cause members of two such agencies that deal with labor issues.

But the majority also notably said that the Federal Reserve differs from the National Labor Relations Board and the Merit Systems Protection Board.

The court called the central bank a “uniquely structured, quasi-private entity,” signaling the justices would likely uphold the constitutionality of a provision protecting the bank's leaders from being removed without cause.

Trump, however, argues he has sufficient justification. Trump said he fired Cook in August for allegedly making false statements on mortgage applications before she began her 14-year term in 2023.

Cook says Trump's real beef is policy dispute

Cook hasn’t been charged with a crime and hasn’t had a chance to respond formally to Trump’s allegations that she declared more than one home as her “primary residence” in an effort to get a more favorable interest rate for a second home.

Documents reviewed by Reuters show Cook declared the second property a “vacation home,” countering other documents Cook’s critics have cited.

The law allows a Fed member to be removed “for cause,” but does not elaborate on what would qualify as a cause or specify a procedure for proving someone has committed a disqualifying act.

Cook argues that Trump's allegations are a pretext to fire her for her stance on monetary policy.

"The President purported to remove Governor Cook only after repeatedly criticizing her and her colleagues for failing to make monetary-policy choices that would prioritize short-term growth over long-term stability," her lawyers told the Supreme Court.

Congress set up Fed to be independent of political pressure

The Fed sets interest rates that help determine the pace at which the economy grows. Trump has berated Fed Chairman Jerome Powell for being too slow to lower interest rates to spur growth.

While the president, in his second term, has often chimed in with criticism, Congress set up the seven-member Fed board in 1913 to make its economic decisions independent of political pressure.

Cook's lawyers have focused on the tradition of independence in their arguments.

"An order from this Court allowing the removal of Governor Cook will thus threaten grave harm to the American economy," her lawyers told the Supreme Court in a Sept. 25 filing.

Trump says courts have limited review

The Justice Department argued in a Sept. 18 filing that the Federal Reserve Act's "for cause" provision is broad, ruling out only firing a member for no reason or firing someone based on a policy disagreement.

And as long as the president has any other justification, that reason is not reviewable by the courts, Solicitor General John Sauer told the Supreme Court in the filing.

“That the Federal Reserve Board plays a uniquely important role in the American economy," Sauer wrote, "only heightens the government’s and the public’s interest in ensuring that an ethically compromised member does not continue wielding its vast powers."

Sauer also said Cook wasn't entitled to a formal chance to respond and, in any case, she didn’t attempt to counter the allegations when Trump first raised them.

“Having declined to bring any defense to the President’s attention or to dispute any material facts, Cook cannot complain about insufficient process,” he wrote.

Cook's lawyers said she was entitled to be officially notified about why the president wanted to remove her and must be given a hearing through a process that courts can review.

"The bottom line is this: Contrary to the President's boundless assertion of authority, there must be some meaningful check on the President's ability to remove Governor Cook," they wrote.

Contributing: Bart Jansen

This article originally appeared on USA TODAY: Supreme Court says Trump cannot, for now, remove Lisa Cook from Fed; will take up matter in January

Reporting by Maureen Groppe, USA TODAY / USA TODAY

USA TODAY Network via Reuters Connect