The Supreme Court on Wednesday appeared deeply skeptical of President Trump's power to fire Federal Reserve board member Lisa Cook, with a majority of justices signaling they would likely keep her in her position while her legal challenge continues.
The case marks an unprecedented clash between a president and the nation's central bank. Trump has mounted an aggressive campaign to control the Federal Reserve's policy decisions, pressuring it to lower interest rates and even musing about firing Fed Chair Jerome Powell. The Cook case represents his most direct legal attempt to reshape the board.
Background
Under federal law, the president can only remove a Federal Reserve governor "for cause," though the law does not define what that means. Trump posted a letter on his Truth Social account in August 2025 firing Cook, claiming she made misstatements on a mortgage application for a second home, allegedly describing it as a "primary" residence to secure more favorable loan terms.
Cook refused to resign and went to court. A federal judge in Washington, D.C. issued an order allowing her to stay at the Fed while she challenged the firing. When a federal appeals court upheld that decision in September, the Trump administration asked the Supreme Court to intervene and allow her removal.
The Justice Department has opened a criminal investigation into Cook's mortgage application, though she has not been charged with any crime. Cook maintains that Trump is using a single reference in a 2021 mortgage document as a pretext for a politically motivated effort to control the Fed's policy decisions.
Key Details
During oral arguments on Wednesday, the justices pressed Trump's Solicitor General John Sauer on multiple fronts. They questioned whether the president should have such broad power to remove Fed governors and whether Cook deserved a formal hearing before being fired.
Justice Brett Kavanaugh, a Trump appointee, raised concerns about the long-term implications of allowing easy removal of Fed board members. He warned that if Trump succeeded, future Democratic presidents could remove all of Trump's appointees when they took office.
"What goes around comes around. All the current president's appointees would likely be removed for cause on Jan. 20, 2029, if there's a Democratic president or Jan. 20, 2033, and then we're really at 'at-will' removal. So, what are we doing here?" – Justice Brett Kavanaugh
Justice Sonia Sotomayor questioned whether a mistake on a mortgage application really constituted "gross negligence" as Sauer claimed. Chief Justice John Roberts seemed unimpressed by the severity of the allegations, suggesting that mortgage paperwork errors were not particularly grave.
The due process question
A central issue in the case is whether Cook was entitled to a formal hearing before being removed. Paul Clement, the former Solicitor General arguing for Cook, stressed that without judicial review of Trump's decision, the entire system would collapse.
"If there's no judicial review, then this is all kind of a joke. I mean, we can sit here and posit that, 'Well, this would be for cause, and that would be for cause,' but none of it would matter." – Paul Clement
Clement argued that allowing Trump to remove Cook immediately would cause enormous harm to financial markets because of the Fed's unique role in setting monetary policy. He noted that Trump himself had acknowledged the Fed is different and that removal cannot be based on policy disagreements.
What This Means
The Supreme Court's apparent skepticism of Trump's position has major implications for Federal Reserve independence. Former Fed leaders and leading economists have warned that if Trump succeeds in removing Cook this way, it would damage public confidence in the central bank and undersettle financial markets worldwide.
The justices seemed likely to deny Trump's request to immediately remove Cook while litigation continues, though it remained unclear whether they would rule on the broader legal questions or simply send the case back to lower courts. A majority appeared inclined to leave Cook in her job, at least temporarily.
Trump has been relentless in pressuring the Fed to cut interest rates. Last week, he attacked Powell again during a speech in Switzerland and said he expected loyalty from his nominees to the central bank. The Justice Department also sent grand jury subpoenas to the Fed seeking information about Powell's statements to Congress, which Powell characterized as a threat designed to pressure him into slashing borrowing costs.
Cook said in a statement after the arguments that the case is fundamentally about whether the Fed will operate based on evidence and independent judgment or succumb to political pressure.
"For as long as I serve at the Federal Reserve, I will uphold the principle of political independence in service to the American people." – Lisa Cook
A federal appeals court had already ruled in September that Cook's due process rights were violated when Trump fired her without giving her a chance to respond to the allegations. Two judges on that panel, both Biden appointees, said removing her immediately could have a "disruptive effect" on the Federal Reserve. One Trump appointee on the panel disagreed, arguing the president should have power to remove her if her continued service could compromise Fed decisions.
The Supreme Court's decision could come within weeks and will likely determine whether Cook remains on the Fed board for the foreseeable future.
