SCOTUS To Hear Arguments on Trump’s Firing of Federal Reserve Board Member

The U.S. Supreme Court is set to hear arguments this week in a closely watched case that could reshape the balance of power between the presidency and the Federal Reserve, as the justices consider whether President Donald J. Trump, currently serving his second term, has the constitutional authority to remove a sitting member of the Fed’s Board of Governors.

At the center of the dispute is Trump v. Cook, a case arising from President Trump’s decision to dismiss Federal Reserve Governor Lisa D. Cook, an economist appointed by former President Joe Biden. Cook is challenging her removal, arguing that it violates statutory protections meant to insulate the central bank from political pressure.

President Trump has maintained that Cook committed mortgage fraud prior to her appointment to the Federal Reserve, an allegation she has denied, dismissing it as politically motivated. Cook, who was confirmed to a new 14-year term in 2023 and is the first black woman to serve on the Fed’s Board of Governors, has remained in her position after lower courts blocked her dismissal. Those courts concluded she was likely to prevail under the Federal Reserve Act’s “for cause” removal standard.

In late August, the Supreme Court allowed Cook to stay on the board while the litigation continued, signaling at least temporary caution from the justices. That move followed earlier remarks from members of the Court characterizing the Federal Reserve as a “uniquely structured” institution with a “distinct historical tradition” that places it outside routine presidential control — even as the Court has permitted President Trump to remove leaders of other independent agencies, such as the Federal Trade Commission.

Legal scholars say the case carries significant implications for executive authority and economic governance. The Federal Reserve Act permits removal of governors only “for cause,” a safeguard designed to prevent direct political interference in monetary policy.

“I think they worry about the effect that removal of central bank independence could have on ⁠the economy,” said John Yoo, who served as a Justice Department lawyer under former President George W. Bush.

“It seems a basic principle of macroeconomics, backed up by the experience of other countries, that political control over the money supply, interest rates, and central banking will inevitably lead to inflation,” said Yoo, now a law professor at the University of California, Berkeley.

Other legal observers note that the outcome could define how far presidential authority extends in shaping economic policy. Columbia Law School professor Kathryn Judge said disputes over Federal Reserve independence, alongside President Trump’s tariff policies, “will be key in determining the scope of the president’s authority to unilaterally determine economic policy.”

“This Supreme Court has taken a very expansive approach to executive authority,” Judge added, “but it is not unbounded.”

University of Illinois Chicago law professor Steve Schwinn suggested the Court may be increasingly wary of undermining the Fed’s autonomy. “With each passing day — ⁠and with each passing attack by the Trump administration — I suspect that the court increasingly sees the value of an independent Fed,” he said.

Yoo, however, argued that the administration’s broader strategy could complicate the legal battle, saying that “Trump is not helping his own case with the Department of Justice’s implausible criminal investigation” of Federal Reserve Chair Jerome Powell.

Powell has publicly condemned a Justice Department probe into his conduct as politically motivated, describing it as retaliation connected to his congressional testimony regarding a costly Federal Reserve building project. Powell has claimed the investigation is aimed at pressuring the Fed to lower interest rates — a charge President Trump has denied.

Critics of the president argue that the effort to remove Cook and scrutinize Powell reflects an attempt to steer monetary policy ahead of the 2026 midterm elections. Supporters of Cook contend that strict adherence to statutory protections is vital to preserving the Federal Reserve’s independence.

Meanwhile, Cook faces growing scrutiny of her own. Federal housing regulators have issued criminal referrals related to alleged discrepancies in her property filings, fueling renewed questions about her eligibility to serve.

CNN previously acknowledged the gravity of the allegations, with legal analyst Elie Honig describing the activity as “really problematic” for Cook.

The Supreme Court is expected to issue its ruling by June, a decision that could have lasting consequences for executive power, economic policy, and the future independence of the nation’s central bank.