SCOTUS weighs Trump’s firing powers with Fed’s Lisa Cook

The Supreme Court will review the president Donald Trump The attempt to fire Federal Reserve Governor Lisa Cook on Wednesday — a consequential and closely watched case that could give Trump an unprecedented level of influence over the nation’s central bank.

Lawyers for the Trump administration asked the Supreme Court last fall to halt a lower judge’s ruling that prevented Trump from immediately removing Cook from her position on the Federal Reserve Board of Governors so that the court could hear a lawsuit she filed challenging her removal.

The Supreme Court agreed to hear the case in October, but said Cook could remain in her position pending review — marking a rare case in which the court’s conservative-majority justices rejected the administration’s request for emergency intervention.

This may be partly due to the novelty of the case. If successful, Trump’s firing of Cook would be the first time a president has fired a Fed governor in the bank’s 112-year history.

It also comes as tensions between Trump and the Fed escalate to a fever pitch.

Lawyers for Cook and the Department of Commercial Justice are embroiled in a high-stakes fight over the Fed’s dismissal

At issue in the case is whether Trump met a necessary “for cause” requirement to remove Cook from the powerful seven-member Federal Reserve Board. Trump announced his plans to fire Cook in a social media post in August, citing mortgage fraud allegations made by Trump administration official Bill Bolt.

For her part, Cook strongly denied these allegations, describing them as “fake charges” aimed at creating a pretext for her impeachment. No charges have been brought against her yet.

Her lawyers are scheduled to argue in court Wednesday that Trump’s attempt to fire her is “unprecedented and illegal,” a veiled attempt by Trump to wrest control of the Federal Reserve.

“Granting this relief would dramatically alter the status quo, ignore centuries of history, and turn the Fed into a body subject to the will of the president,” Cook’s lawyers said in a lawsuit. supreme court Deposit.

Meanwhile, administration lawyers will argue that the powers to protect Trump from removal are discretionary under federal law.

“Simply put, the President may reasonably determine that the interest rates paid by the American people should not be set by a governor who appears to have lied about material facts regarding the interest rates she guaranteed herself — and who refuses to explain the obvious misrepresentations,” said U.S. Attorney General D. John Sawyer for the Supreme Court on appeal of the case.

Federal Reserve Governor Lisa Cook files lawsuit against Trump

US Federal Reserve Chairman Jerome Powell speaks with Lisa Cook, a member of the Federal Reserve Board of Governors, at the Federal Reserve Building in Washington, D.C., on June 25, 2025. (Saul Loeb/AFP/Getty Images)

The justices have the option of either reviewing the case narrowly — ruling only on whether the lower court’s ruling should be left in place — or bringing the larger constitutional questions raised by the case to the forefront, including the legality of Trump’s efforts to remove Cook under the Federal Reserve Act and other similar laws designed to insulate the bank from political pressure.

Wednesday’s case is not the first time the Supreme Court has been tasked with reviewing the legality of Trump’s attempt to fire the head of an independent, multi-member federal agency.

In December, the Supreme Court heard oral arguments in the case Trump v. Slaughter, a case centered on Trump’s firing of Federal Trade Commission member Rica Slaughter without cause. Slaughter filed a lawsuit challenging her removal, but the Supreme Court declined to leave her in that role pending arguments.

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Federal Reserve Chairman Jerome Powell in Washington, D.C (Wayne McNamee/Getty Images)

Although Trump administration officials insist that the case is narrowly focused on impeaching Cook, the oral arguments as a whole will be scrutinized by major players in the financial markets, including investors, bankers and business owners, for signs of how the Supreme Court might rule.

The short-term ripple effects could be felt sooner rather than later, with the next Federal Open Market Committee meeting scheduled for later this month.

Trump has repeatedly criticized Fed Chairman Jerome Powell and other members of the central bank for his reluctance to cut benchmark interest rates as much as he wants, deepening rapidly growing fault lines that have routinely pitted Trump against Fed leaders.

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Powell said the Justice Department subpoenaed the agency last week over allegations that it lied to congress about the costs of a large-scale renovation of its headquarters.

Powell said he plans to attend oral arguments on Wednesday.