As many expected, the legal battle between U.S. President Donald Trump and Federal Reserve Governor Lisa Cook has now landed in the Supreme Court after Trump requested on Thursday that its justices override the temporary injunction issued by U.S. District Judge Jia Cobb. The injunction blocked the president’s August 25 order to fire Cook for alleged mortgage fraud.

(U.S. Federal Reserve Governor Lisa Cook took U.S. President Donald Trump to court last month after he tried to fire her for allegedly committing mortgage fraud)

It all began in 2021 when Cook took out two mortgages in short order, one for a property in Ann Arbor, Michigan and the other for a condo in Atlanta, Georgia. Cook indicated that each property would serve as her principal residence on both mortgage applications, which were completed just two weeks apart. The Atlanta condo was then listed for rent within a couple of months and Cook never reported rental income for 2022 or 2023 in her government disclosures. That’s the story according to the Trump administration.

But Cook says the principal residence issue was a genuine mistake. She’s also arguing that it happened before she was appointed as a Fed governor. Both Judge Cobb and Cook’s lawyer Abbe Lowell say the governor’s actions don’t quite meet the required “for cause” standard that Trump needs to demonstrate before he fires a Federal Reserve governor; something that has never been done since the central bank was established in 1913.

“The best reading of the ‘for cause’ provision is that the bases for removal of a member of the Board of Governors are limited to grounds concerning a Governor’s behavior in office and whether they have been faithfully and effectively executing their statutory duties,” Cobb wrote in her opinion memorandum last week. “‘For cause’ thus does not contemplate removing an individual purely for conduct that occurred before they began in office.”

But the Trump administration’s Dean John Sauer, solicitor general of the United States disagrees with Cobb and Powell, and has labeled the district judge’s ruling as “improper judicial interference.”

“This application involves yet another case of improper judicial interference,” Sauer wrote in his legal application to the Supreme Court. “Interference with the President’s authority to remove members of the Federal Reserve Board of Governors for cause.”

Interestingly, several Trump administration officials have also listed multiple primary residences on their loan applications to obtain lower borrowing rates, according to some reports. Bloomberg reported on Wednesday that Treasury Secretary Scott Bessent simultaneously listed two different properties as primary residences on a couple of 2007 mortgage applications. Bessent’s lawyer Alex Spiro dismissed the allegations as “nonsensical.”

Cook participated in the Fed’s two-day interest rate meeting which concluded on Wednesday. She voted to cut the policy rate by 25 basis points, a move Trump has been calling for all year. The president may end up appointing four out of the seven Fed governors if his campaign to remove Cook is successful. Many see Trump’s actions as an affront to Fed independence.

“A scenario where Fed independence is damaged would likely lead to higher inflation, lower stock and long-dated bond prices, and an erosion of the dollar’s reserve-currency status,” said analysts from investment banking giant Goldman Sachs according to the Financial Times.

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