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

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

Trump administration lawyers last fall asked the high court to stay a lower judge’s decision that blocked Trump’s immediate firing of Cook from his post on the Federal Reserve Board until the court considers a lawsuit he filed challenging Cook’s dismissal.

The Supreme Court agreed to hear the case in October but said Cook could remain in his post pending the review; This is a rare example of justices on a conservative-majority court rejecting the administration’s request for emergency intervention.

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

This also comes at a time when tensions between Trump and the Fed are at their highest.

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At issue in the case is whether Trump met the “trial” requirement to oust Cook from the Fed’s powerful, seven-member board of governors. Trump announced plans to fire Cook in a social media post in August, citing mortgage fraud allegations made by Trump administration official Bill Pulte.

Cook has vehemently denied the allegations, describing them as “fabricated accusations” designed to provide a pretext for his dismissal. To date, no charges have been brought against him.

His lawyers will argue in court Wednesday that Trump’s attempt to fire him was “unprecedented and illegal” and a thinly veiled effort by Trump to gain control over the Fed.

“Giving this aid would dramatically change the status quo, ignore centuries of history, and turn the Federal Reserve into an institution subject to the will of the president,” Cook’s lawyers wrote. he said. Supreme Court filing.

Meanwhile, administration lawyers will argue that Trump’s impeachment protection powers are discretionary under federal law.

“Simply put, the President may reasonably decide that the interest rates paid by the American people should not be set by a governor who lies about material facts about the interest rates he has secured for himself and refuses to disclose apparent misrepresentations,” U.S. Attorney General D. John Sauer told the Supreme Court in appealing the case.

FEDERAL RESERVE GOVERNOR LISA COOK FILED A LAWSUIT AGAINST TRUMP

U.S. Federal Reserve Chairman Jerome Powell speaks with Federal Reserve Board member Lisa Cook at the Federal Reserve Board building in Washington, DC, on June 25, 2025. (Saul Loeb/AFP/GettyImages)

The justices have the option of either reviewing the case narrowly — ruling only on whether the lower court should have left its ruling in place — or raising larger constitutional questions the case raises, including the legality of Trump’s effort to fire Cook under the Federal Reserve Act and other similar laws designed to protect the bank from political pressures.

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

The Supreme Court heard oral arguments in December. Trump v. The Slaughter case focused on Trump’s unprovoked firing of FTC member Recca Slaughter. Slaughter filed suit to challenge his dismissal, but the high court refused to reinstate him until arguments continued.

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Federal Reserve Chairman Jerome Powell in Washington DC (Win McNamee/Getty Images)

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

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

Trump has repeatedly criticized Fed Chairman Jerome Powell and other members of the central bank for their reluctance to cut benchmark interest rates as aggressively as he would like, deepening fast-growing fault lines that routinely pit Trump against Fed leaders.

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Powell said the agency was subpoenaed by the Justice Department last week over allegations it lied to Congress about the cost of a major renovation of its headquarters.

Powell said he plans to attend oral arguments on Wednesday.