Federal Reserve Governor Lisa Cook leaves the U.S. Supreme Court after the court heard oral arguments in the Trump v. Cook case on January 21, 2026 in Washington, DC. (Photo by Kevin Dietsch/Getty Images)
WASHINGTON – U.S. Supreme Court justices from across the political spectrum expressed skepticism about President Donald Trump’s swift, informal firing of Federal Reserve Governor Lisa Cook and his attempt to influence the independent central bank that governs monetary policy in the United States.
Wednesday’s oral arguments drew a high-profile appearance in the courtroom of Federal Reserve Chairman Jerome Powell, who is now the target of a Justice Department investigation. For months before the federal investigation, Trump threatened to fire Powell if the chairman didn’t quickly cut interest rates.
For two hours, the justices heard debates about whether Cook could remain on the panel as a lower court judge governedas the lawsuit continues to examine whether Trump violated a “for cause” removal rule when he fired her over social media in tardy August.
Trump claimed in an August 25 letter posted on his Truth Social platform that Cook committed financial fraud by lying about mortgage loan documents. Trump said he had “reasonable cause” to fire Cook for alleged “fraudulent and potentially criminal conduct in a financial matter.”
Under the Federal Reserve Act, the president can only remove board governors “for cause” — as provided by Congress to preserve the central bank’s independence.
Trump claims his firings of members of independent government agencies are not subject to judicial review.
Cook has denied any wrongdoing and challenged The president, the board and Powell essentially argued in court that a “baseless allegation regarding private mortgage applications” made before her Senate confirmation was not grounds for removal. Cook also argued that Trump denied her due process by failing to give her notice or an opportunity to respond to his allegations.
Cook, an appointee of former President Joe Biden, has continued to carry out her board duties without interference from Powell.
Alito questions the “hasty nature” of the shooting
During lengthy questioning of U.S. Attorney General John Sauer, Justices Amy Coney Barrett and Ketanji Brown asked Jackson about the risk of allowing Cook to remain in office while the government presented its case to the lower courts.
“The question is: What’s the harm in letting this injunction stay in place because she’s in office now and would just move on?” Brown asked.
Sauer, Trump’s former personal defense attorney, said the administration contends that allowing it to remain in office would be “serious, irreparable harm to the public perception of the Federal Reserve.”
“Do you have evidence of public perception or is that just the president’s opinion?” Jackson, a Biden appointee, pushed back.
Sauer said the evidence on Cook’s two separate mortgage applications was included in Trump’s “dismissal order,” referring to the letter posted on social media.
Moments later, Brown asked whether Cook “was given an opportunity in a formal proceeding to challenge this evidence or explain it?”
“No formal process. She was given a chance publicly,” Sauer said.
“In the world? Like she should have posted about it and this was the opportunity to be heard that you think she was given?” Brown asked.
“Yes,” replied Sauer.
Justice Samuel Alito, one of the most conservative members of the Supreme Court, asked Sauer why the removal had to happen “so hastily.”
“You initially set out what you believe is the factual basis for for cause cancellation, but no court has ever examined those facts. Are the mortgage applications in this case even on the record?” asked Alito, who was appointed to the court under President George W. Bush.
“I know that the text of the social media post containing screenshots of the mortgage applications is included in the paperwork. I can’t recall if the documents themselves were included in the paperwork,” Sauer said.
Independence of the Federal Reserve
In several minutes of back-and-forth, Judge Brett Kavanaugh pressed Sauer on the importance of the Federal Reserve’s independence.
“Let’s talk about the real downstream effects of this. Because if this were set as a precedent, I think – just thinking about the big picture of what’s happening, what’s coming – all of the current president’s appointees would probably be removed for cause on January 20, 2029, if there’s a Democratic president, or January 20, 2033,” argued Kavanaugh, who was appointed during Trump’s first term.
“We’re really in the process of removing at will. So what are we doing here?” he asked.
“I can’t predict what future presidents will or won’t do,” Sauer replied.
“Well, history is a pretty good guide. Once these tools are unleashed, they are used by both sides, and usually even more so the second time around,” Kavanaugh said.
Later, Kavanaugh questioned Cook’s attorney, Paul Clement, whether his argument “shifted the balance too far in the opposite direction from the attorney general’s position.”
Clement responded: “This is a situation in which Congress and all politicians knew better than anyone that the short-term temptations to cut interest rates and make easy money were a disaster in the long run, but would be irresistible.”
“And so they tied their own hands by taking the Fed out of the appropriations process, and they tied the president’s hands,” said the Alexandria, Virginia, lawyer.
In a statement following the arguments, Cook said the case is about “whether the Federal Reserve will set interest rates based on evidence and independent judgment or whether it will cave to political pressure.”
“Research and experience show that the independence of the Federal Reserve is essential to fulfilling Congress’s mandate of price stability and maximum employment. For this reason, Congress has chosen to protect the Federal Reserve from political threats while holding it accountable for fulfilling that mandate. As long as I serve at the Federal Reserve, I will uphold the principle of political independence in the service of the American people,” Cook continued in the statement.
Regulating interest rates – to chilly inflation or stimulate the economy – is a tool through which the central bank fulfills its dual mandate of employment and price stability.
Summons issued
The altercations came just a dozen days after Powell received a federal grand jury subpoena as part of a Justice Department investigation into allegations that he lied to Congress about multiyear renovation costs for the central bank’s headquarters in the District of Columbia.
The revelation of a federal investigation into Powell sparked piercing criticism even from some Republicans.
Powell claimed in a uncommon case Video statement that the government’s “unprecedented actions should be seen in the broader context of the government’s threats and continued pressure.”
He continued: “The threat of criminal charges is a result of the Federal Reserve setting interest rates based on our best judgment of what serves the public, rather than the president’s preferences.”
Trump nominated for the first time Powell was appointed to lead the Federal Reserve in 2017 for a four-year term that began in February 2018. Biden reappointed him in 2021 and Powell received overwhelming support in a year 80-19 Senate confirmation vote.
Wednesday’s arguments also came less than two months after the Supreme Court Arguments heard in Trump’s firing of another member of an independent federal agency, Federal Trade Commissioner Rebecca Slaughter.
