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US Supreme Court justices appeared skeptical of Donald Trump’s efforts to fire Federal Reserve Governor Lisa Cook as they heard arguments in a case with wide implications for the independence of the world’s most important central bank.
The hearing comes after Trump in August ordered Cook’s firing over mortgage fraud charges, which she denies. This is the first time a US President has attempted to remove a Fed Governor.
A federal judge blocked the move pending litigation, a decision that was later upheld by an appeals court. The top US court later blocked Trump’s attempt to fire Cook until it heard oral arguments in the case.
Several judges on Wednesday appeared wary of Solicitor-General John Sawyer’s arguments that courts should not have reinstated Cook and that Trump has the power to fire him without due process.
Justice Samuel Alito, appointed by Republican former President George W. Bush, noted the “hasty manner” in which the Trump administration was seeking to remove the Fed governor.
Justice Brett Kavanaugh, another member of the court’s conservative wing, warned that the government’s position that no judicial review or process was required when firing Fed governors could “undermine, if not weaken” the Fed’s independence.
“What happens is … once these tools are unleashed, they are used by both parties,” he said, pointing to the risk that they could “encourage” presidents to “bring up frivolous or irrelevant or old allegations that are very difficult to refute” in an effort to fire Fed officials.
The hearing, which was attended by Fed Chairman Jay Powell, comes at a time when Trump and many of his allies have consistently criticized the central bank for not cutting interest rates more deeply to spur faster growth. Powell revealed earlier this month that he was the subject of a criminal investigation by the Justice Department over a $2.5 billion renovation of the Fed’s headquarters.
Top Fed officials can only be removed by the President “for cause” – a rarely tested term that is usually interpreted by legal scholars as gross misconduct.
Paul Clement, representing Cook, described Sawyer’s arguments as “somewhat watered down the eviction ban on this unique institution that can only be recognized at will”.
Cook said in a statement after the hearing that “this case is about whether the Federal Reserve will set key interest rates guided by evidence and independent judgment or bow to political pressure”.
The Cook case has pushed the Supreme Court into one of Trump’s boldest attempts to reshape the government. It comes as America’s most powerful bench considers several aspects of his sweeping agenda from immigration to tariffs in his second term, raising fundamental questions around the president’s authority.
The court, which is split 6-3 between conservative and liberal justices, has often sided with Trump in past cases.
Trump attempted to fire Cook, the first Black woman to serve as a Fed governor, after Federal Housing Finance Agency Director Bill Pulte alleged that she had claimed both a house in Michigan and a condominium in Atlanta as her principal residence on mortgage forms.
The government alleged in a court filing that the President “lawfully” removed Cook whose “conduct gave the appearance of disloyalty in financial matters”.
Columbia University professor Lev Menand said the justices’ questioning on Wednesday indicated they did not think the administration presented strong enough evidence against the Fed governor.
“A serious weakness that emerged in the President’s case is that the judges did not agree that the evidence the President presented, even beyond anything Cook put into the record, tended to show gross negligence as opposed to mere negligence, which many judges felt would be clearly insufficient,” Menand said.
Cook, who was appointed to the Fed by former President Joe Biden in 2022, has denied the allegations and has not been charged.
His lawyers argued in the brief that the Fed’s “historic independence and statutory protections… prohibit the immediate removal” of Governor Cook.
He said, “He was ‘criminally referred’ by a subordinate of the President, who used his office to initiate investigations into alleged opponents of the President, including Chair Powell.” The DoJ has rejected allegations of political interference.
The Supreme Court has allowed Trump to remove officials from independent agencies including the National Labor Relations Board and the Merit System Protection Board. But the order signaled that Fed officials may face tighter security.
