The U.S. Supreme Court signaled serious doubts Wednesday about President Donald Trump’s attempt to fire Federal Reserve Governor Lisa Cook, a case that puts the independence of America’s central bank under intense scrutiny.
Justices Question Basis for Firing
During about two hours of arguments, conservative and liberal justices pressed the Trump administration on why Cook was not given a formal chance to respond to mortgage fraud allegations she denies. Many justices expressed concern over the unprecedented nature of a president removing a Fed governor and how it could destabilize the economy.
Chief Justice John Roberts repeatedly questioned whether mistakes on mortgage paperwork could justify such a drastic action, while Justice Brett Kavanaugh noted that Trump’s approach could “shatter” the Fed’s independence if allowed to proceed unchecked.
Cook Denies Allegations, Sees Political Motive
Cook’s attorneys argued that the allegations cited by Trump were pretextual, aimed at punishing her over monetary policy differences. The Fed has resisted political pressure to cut interest rates, frustrating Trump’s efforts to influence U.S. economic policy.
Her term on the board runs until 2038, and she is the first Black woman to hold the position, appointed in 2022. Cook and her legal team stressed that her removal without due process would violate constitutional rights.
Economic Stakes Are High
Justices repeatedly raised concerns about the potential effects of firing a Fed governor mid-term. Economic experts warned that the move could trigger market instability and even a recession. Justice Amy Coney Barrett noted that risk alone suggested caution, while Justice Samuel Alito criticized the administration for handling the case “in a very cursory manner.”
Trump’s solicitor general, D. John Sauer, insisted that allegations of “deceit or gross negligence” justified immediate removal, but the court’s pointed questions reflected skepticism about both the legal and practical reasoning.
Independence of the Fed on the Line
The case is widely seen as the most significant challenge to the Fed’s independence in more than a century. The Federal Reserve Act protects governors from political interference, allowing removal only “for cause,” but the law does not define that term.
Legal experts note that if the Supreme Court sides with Trump, it could set a dangerous precedent, making the Fed vulnerable to future political pressures and undermining its ability to manage interest rates and control inflation effectively.
Trump’s Broader Power Moves
This case is part of a pattern in which Trump has tested presidential powers since returning to office, including attempts to fire officials across federal agencies and reshape independent boards. Observers say a ruling against Trump would reinforce limits on executive overreach, while a victory could alter the balance of power between the White House and independent institutions for decades.
What Comes Next
The justices did not issue an immediate ruling, leaving Cook in her role for now. The decision will have wide-reaching implications not just for her tenure, but for the U.S. economy and the principle that the Federal Reserve operates independently from political influence.
Experts warn that this high-profile case could redefine how future presidents interact with America’s financial regulators and the limits of executive authority in times of political tension.
