What we're covering
• Several conservative justices thus far have been skeptical of President Donald Trump’s attempt to fire Federal Reserve Governor Lisa Cook.
• The case, one of the most important the 6-3 conservative Supreme Court will decide this year, has implications for the extent of presidential power and the independence of the central bank.
Some Fed officials have been investigated, but none were fired until Trump's attempt
Up until President Donald Trump’s attempt to fire Federal Reserve Governor Lisa Cook last year, no other president has ever attempted to do so in the central bank’s long history, as Paul Clement, Cook’s attorney, pointed out.
“The Federal Reserve is a uniquely structured entity with a distinct historical tradition,” Clement said. “Part of that historical tradition is an unbroken history going back to its founding in 1913 in which no president from Woodrow Wilson to Joseph Biden has ever even tried to remove a governor for cause, despite the ever-present temptation for lower rates and easier money.”
Indeed, all presidents before Trump have resisted firing Fed officials, even though some central bankers have been subject to investigations while in office. In 2020, Robert Kaplan, then head of the Federal Reserve Bank of Dallas; and Eric Rosengren, president of the Boston Fed, carried out financial transactions at a time when the Fed deployed large-scale operations to stabilize the economy in the beginning of the pandemic.
After a yearslong probe, the Fed’s internal watchdog in 2024 cleared both policymakers of wrongdoing. They both retired in 2021 and neither was subject to a firing attempt.
That’s in contrast to Cook, whom Trump is trying to push out over accusations that she committed mortgage fraud before she even assumed her current role.
Fed Chair Jerome Powell is also now under investigation by the Justice Department over testimony he gave to Congress on a renovation of the Fed’s headquarters.
Supreme Court shielded the Fed from Trump last year
The Supreme Court has previously drawn a line of protection around the independence of the Federal Reserve, asserting in an opinion last year that the agency’s unique structure and “distinct historical tradition” made it different from other agencies Trump has attempted to seize control of since returning to power last year.
In another case last year, the court allowed Trump to fire federal labor officials — but stressed that the Fed was different.
Cook has relied heavily on that single sentence in her written arguments.
But critics, even those who support independence for the Fed, have questioned the logic of the court allowing Trump to fire the leaders of some independent agencies but not the Fed. Squaring those positions is likely to be central to the oral arguments.
“It’s logically incoherent and doctrinally unworkable,” said Lev Menand, a law professor at Columbia University who published a book on the central bank in 2022. “The legal commentariat have ambitions that the court can flesh this out into something that makes sense, but I’m highly skeptical.”
Justices are focused on due process: Here's why
Key justices asked President Donald Trump’s lawyer about the government’s due process obligations to Lisa Cook. It’s a crucial question because that was the basis of DC Circuit ruling that the administration wants put on pause.
Due process refers to constitutional protections that prohibit deprivations “of life, liberty or property without due process of law.” It protects people from being subject to arbitrary and unjustified actions by the government that infringe on their rights.
The clause typically requires some sort of process before the government takes such an action against a person – and often, an opportunity during that process for the person to respond.
Trump has countered that Cook was not entitled to due process because holding an office in the federal government is not “property” that Trump’s action is depriving her of.
The DC Circuit indicated that it was not disturbing a judge’s order temporarily reinstating Cook to her position because it agreed with the arguments that the firing likely violated her due process rights.
The justices have asked the president’s lawyer, US Solicitor General D. John Sauer about Trump’s failure to offer Cook a formal proceeding to respond to the allegations Trump was making against her to justify her removal.
Justice Samuel Alito, however, also asked Cook’s attorney about the claim that holding office amounts to property for due process purposes.
Cook puts Marbury v. Madison in the spotlight
Federal Reserve Governor Lisa Cook is leaning in part on a landmark 19th-century Supreme Court decision to press her case that she has a “legal right” in her office.
The high court’s 1803 decision in Marbury v. Madison is known for its seismic effect on the structure of the federal government: It established the Supreme Court’s power to review and strike down congressional acts.
But the ruling from Chief Justice John Marshall – stemming from then-Secretary of State James Madison’s refusal to deliver a judicial commission issued by outgoing President John Adams – also held that William Marbury had a “vested legal right” in his office and that his claim to it was reviewable by federal courts.
A central sticking point in the Cook case is whether a federal official fired by the president can even have their case reviewed by courts. Trump has argued they cannot. Cook counters that the court said differently in Marbury, a decision that is usually the first read by every constitutional law student and that is still frequently cited by the justices.
“In the ensuing two centuries, this court has ‘consistently reviewed – and sometimes invalidated – presidential decisions to fire officers who were removable only for cause,’” Cook’s lawyers wrote.
Trump had a rough first hour of oral arguments in Cook case
President Donald Trump’s effort to remove Lisa Cook from the Federal Reserve faced an uphill fight heading into the Supreme Court arguments Wednesday.
After more than an hour of arguments, the justices gave the administration little reason to think those predictions were wrong. Trump’s attorney, D. John Sauer, faced pointed, difficult questions – not just from the court’s three-justice liberal wing, but also from several conservatives.
Even Justice Samuel Alito, who regularly sides with the administration, seemed annoyed with the way the Justice Department had handled the case.
Cook’s attorney, Paul Clement, is now speaking before the justices.
Barrett asks why administration is “afraid” of giving Cook a hearing to contest fraud allegations
Conservative Justice Amy Coney Barrett at one point pressed Solicitor General D. John Sauer on why the administration is “afraid” of giving Lisa Cook a hearing where she could formally contest the mortgage fraud allegations that President Donald Trump cited as his reason for trying to fire her.
“Why are you afraid of a hearing? Or what would there be that would be wrong with process? I mean, you spent a lot of time litigating the case. It’s gone up from the district court to the court of appeals and now we’re here,” said Barrett, who was appointed to the bench by Trump during his first term.
Sauer is arguing that the administration didn’t need to provide Cook with any more due process than a notice of the allegations and a few days to rebut them, and that federal courts are powerless to order officials to do much more.
“It’s our position that adequate process was already provided,” he told Barrett.
Top Supreme Court lawyer Paul Clement is having a busy year
Federal Reserve Governor Lisa Cook has selected one of the nation’s best-known Supreme Court advocates to make her pitch to the justices, underscoring the significance of the case and a split within conservative legal circles over the president’s power to remove her.
At the lectern now is Paul Clement, a US solicitor general during the George W. Bush adminstration who clerked for Justice Antonin Scalia in the early 1990s, has argued more than 100 cases at the high court — including on the Second Amendment, religious rights and the government’s power to regulate.
Clement is having a particularly active term this year.
He has already won a case for a Republican congressman from Illinois who is challenging that state’s absentee ballot law. He represented major music labels in an important copyright dispute that was argued in December. He also represented Chevron earlier this month in a case dealing with whether Louisiana parishes may sue the petroleum industry in state court over damages oil production caused to the Gulf coast.
Kavanaugh is the latest conservative to signal deep skepticism of Trump’s position
Justice Brett Kavanaugh suggested that he is deeply skeptical of President Donald Trump’s position and the practical impact it would have — the latest conservative justice to raise concerns with the administration’s argument.
“What goes around comes around,” Kavanaugh told US Solicitor General D. John Sauer, pointing to the possibility of a future president’s ability to fire Trump nominees based on “cause” that might be “trivial or inconsequential or old allegations that are very difficult to disprove.”
Even though Kavanaugh was already widely viewed as a strong supporter of Fed independence heading into the arguments, his line of questioning was nevertheless striking.
Under the administration’s theory, Kavanaugh said, “all the current president’s appointments would likely be removed for cause” when Trump leaves office.
Sauer said he doesn’t disagree that Fed independence is important but said there was a “balance to be struck” with the president’s power to run the executive branch.
Trump relies on a 1901 precedent involving an aging commissioner
Part of Solicitor General D. John Sauer’s argument hangs on a 125-year-old precedent involving the removal of a court official who was working in Native American territory and trying to recover more than $5,000 in back pay.
William Reagan was appointed by a court as a commissioner in Native territory in 1893. Three years later, a judge sought to remove Reagan, citing his “age and the infirmities incident thereto.”
Reagan noted he was given no notice of a charge against him and had no opportunity to defend himself — arguments similar to those Cook has raised to dispute her own firing. The Supreme Court nonetheless sided against Reagan, finding that Congress had not explicitly defined which causes could be used to remove him. Reagan, the court concluded, was not entitled to a hearing.
“This court upheld a lower court’s removal of an inferior officer with ‘no notice of any charge against him, and no hearing,’” the Trump administration said in its brief, quoting from the decision in Reagan.
But Cook has argued that case is inapplicable, in large part because Reagan served an indefinite term and was effectively an “at pleasure” employee.
“This case is entirely unlike Reagan,” Cook told the Supreme Court. “In contrast to the commissioner there, Governor Cook serves for a ‘fixed period’ of fourteen years.”
The focus on history underscores how unusual it is to have a president attempting to fire officials at the Federal Reserve and other agencies.
Justice Alito appears annoyed with Trump's rush to fire Lisa Cook
Conservative Justice Samuel Alito appeared to question why the case over Lisa Cook’s firing was being decided on an emergency basis — suggesting a degree of annoyance that the Trump administration rushed the appeal up the Supreme Court.
“Is there any reason why this whole matter had to be handled…in such a hurried manner?” Alito asked Solicitor General D. John Sauer.
Alito described the administration’s handling of the Cook case as being done in a “very cursory manner.” At one point he questioned whether “the mortgage applications are even in the record in this case.”
Unlike most Supreme Court cases that are argued, the Cook matter is an emergency appeal – the kind of case often handled without argument. The justices will ultimately decide whether Cook can be fired while her case continues, though the decision could have a significant impact on the merits of her case.
Sotomayor on Trump’s claims against Cook: "I don't think this rises to an infamous crime"
Justice Sotomayor said that there is a factual dispute about the claims President Trump is making about Fed Governor Lisa Cook, suggesting that more proceedings should play out at lower courts before the Supreme Court intervenes.
“I don’t think this rises to an infamous crime,” Sotomayor told US Solicitor General John Sauer, referring to a legal standard that might be relevant to the case.
Her inquiry of Sauer noted that the evidence that has come out about Cook’s representations to her banks that undercut the idea that the banks were deceived.
Threat of economic disaster looms large over Cook case and tariffs dispute
Solicitor General D. John Sauer was asked to respond to predictions that a ruling in favor of President Donald Trump could upend financial markets.
He found himself having to confront elements of an argument he pushed last year when he argued before the Supreme Court in defense of Trump’s sweeping tariffs.
The justices have yet to resolve the challenge to Trump’s “reciprocal” tariffs, but they’ve allowed them to remain in effect for now as they decide the case.
During arguments in that case in November, Sauer told the justices that shooting down the tariffs could risk “ruinous economic and national security consequences” for the United States.
Justice Sotomayor says Supreme Court should let the Cook case cook at lower courts first before intervening
Justice Sonia Sotomayor pressed Solicitor General D. John Sauer on why the Supreme Court should act now to remove Lisa Cook from her role at the Fed, while the case is in an emergency posture, rather than wait for a later date after all the legal issues around her firing had been fleshed out at lower courts.
Sotomayor pressed Sauer on why any harm to President Donald Trump is greater if Cook is kept in office, than the harm to the public and to the Federal Reserve if she is repeatedly removed and returned to her role.
The question came after Sotomayor walked through all the legal arguments Trump is making to the Supreme Court about firing her that were not part of the DC Circuit ruling that the administration has sought to pause.
Sauer claimed that the lower court’s order blocking Trump’s removal of cook was “unprecedented.”
Sotomayor responded that it was “unprecedented” for a president to fire a Federal Reserve officer.
Sauer: "Predictions of doom" over removing Lisa Cook didn't pan out
The Trump administration cast doubt over economists’ predictions that removing Federal Reserve Governor Lisa Cook from her post would have negative economic effects.
Justice Amy Coney Barrett referred to amicus briefs from economists who told the court “if we grant you your stay, that it could trigger a recession.” Solicitor General D. John Sauer rebuffed that view, pointing to stock-market movements after Trump said he fired Cook in August.
“If you look at what actually happened … she was removed on August 25 and the stock market went up for the next three days,” Sauer said. “So, we’ve already had a kind of natural experiment, so to speak, about whether or not the predictions of doom will really be implemented.”
Indeed, investors have been sanguine about Trump’s attacks on the Fed over the past, though a key reason why is because Wall Street is confident that the Supreme Court will ultimately uphold the Fed’s independence, preventing the president from firing Fed officials over policy differences.
John Roberts: "We can debate" if Cook was negligent
Chief Justice John Roberts jumped in earlier than usual in the argument, questioning whether the representations Federal Reserve Governor Lisa Cook made on her mortgage applications were an “inadvertent mistake” or, as the administration says, cause for her removal.
It’s a potential good sign for Cook.
Roberts seemed to question whether the administration could really claim Cook was deceitful if “other documents in the record” suggested she had made a mistake. Roberts appeared to be referring to documents showing that Cook had described one of the homes as a “vacation home” in other records.
“I suppose we can debate that,” Roberts said. “How significant it is in a stack of papers you have to fill out when you’re buying real estate.”
The fact that Roberts was discussing that issue is significant in part because Trump has, in fact, argued that courts are not in a position to debate the significance of the president’s determination that he had cause to fire Cook.
Keep an eye on John Roberts and Brett Kavanaugh during arguments
If the Supreme Court hands down a signed opinion in the case of Lisa Cook’s firing later this year, there’s a decent chance it would be written by Chief Justice John Roberts.
The chief has written extensively in recent years on presidential power, including how and when that power extends to independent agencies.
President Donald Trump’s briefing relies in part on major Roberts opinions dealing with those issues from 2010 and 2020.
The court under Roberts has struck down “for cause” removal protections in other contexts and embraced an expansive view of presidential power to control the executive branch. The question is whether Roberts feels the same way about the Federal Reserve.
Justice Brett Kavanaugh, meanwhile, is heavily cited in briefs for his past views on Fed independence.
Notably, in a 2018 dissent when he was a judge on the DC Circuit Court of Appeals, Kavanaugh wrote that the chair of the Federal Reserve could be considered “an historical anomaly” because of the agency’s “special functions in setting monetary policy.”
Cook herself has pointed to a 2009 law review article in which Kavanaugh wrote that the Federal Reserve “may” be an agency that would be worthwhile to “insulate” from “direct presidential oversight or control” because of its “power to directly affect the short-term functioning of the U.S. economy.”
If Kavanaugh wavers from that thinking during the arguments today it would be a particularly bad sign for Cook and positive development for the White House.
Solicitor General D. John Sauer is arguing on behalf of Trump
The Trump administration’s top advocate before the Supreme Court is arguing in defense of President Donald Trump’s ability to fire Lisa Cook.
“The American people should not have their interest rates determined by someone who, at best, was grossly negligent,” Sauer said in his opening remarks.
Wednesday’s hearing comes as Trump marks the one-year anniversary of his second term, which saw Solicitor General D. John Sauer frequently asking the nine to intervene in a sea of litigation that was jamming up the president’s agenda and limiting his expansive view of presidential power.
Many of those requests were made on the court’s emergency docket, with the justices frequently adopting Sauer’s arguments to give Trump the power to shrink federal agencies or fire other top government officials who have long enjoyed for-cause removal protections.
In the case at hand, Sauer asked the justices to step into the dispute just three days after a federal appeals court ruled in Cook’s favor, citing an “irreparable harm” Trump faced by not being able to keep her off the Federal Reserve.
Sauer, a Rhodes Scholar who clerked for the late Justice Antonin Scalia, is perhaps best known for arguing the Supreme Court case in 2024 that led to Trump receiving broad immunity from criminal prosecution. Given the importance of that case for Trump, it was no surprise the president tapped him to serve as his top appellate attorney in the Justice Department.
Arguments are underway in Fed case at Supreme Court
Chief Justice John Roberts has called the case and arguments are now underway in the Supreme Court’s major case on the Federal Reserve.
First up is US Solicitor General D. John Sauer, who is defending President Donald Trump’s firing of Fed Governor Lisa Cook. Sauer has steered clear of arguments about Fed independence and has instead focused on more limited issues about whether Cook was entitled to due process before Trump attempted to remove her.
The arguments are scheduled for an hour but, given the gravity of the case, will likely go longer.
Supreme Court has repeatedly allowed Trump to fire other officials
The conservative Supreme Court has repeatedly allowed President Donald Trump to fire other leaders at independent agencies.
In May, the justices ruled Trump doesn’t have to rehire senior officials he fired from two independent federal labor agencies that enforce worker protections, the National Labor Relations Board and the Merit Systems Protection Board. Over the summer, the court let the president fire members of the Consumer Product Safety Commission. Months later, the court allowed the president to temporarily remove board members at the Federal Trade Commission.
There have been two instance in which the court has kept in place officials Trump has attempted to fire.
In November, the court blocked Trump from replacing a top official at the Library of Congress in the short term, deferring a decision on that emergency appeal. Shira Perlmutter remains the director of the US Copyright Office.
The other is Lisa Cook, the Fed governor at the center of today’s arguments.
Those other lawsuits involved a slightly different legal issue from the current Fed case. In the earlier disputes, Trump attempted to boot board members without a reason — despite federal laws requiring him to demonstrate malfeasance or neglect. For Cook, the Justice Department says the mortgage fraud allegations qualify as reason enough.
The Fed’s independence is at stake in Cook’s case
The Federal Reserve’s ability to set interest rates without political interference — a cornerstone of US economic policy — is at stake this week in a pivotal Supreme Court case on presidential power.
Federal Reserve Governor Lisa Cook is challenging President Donald Trump’s attempt to remove her from her role. The president cited unproven allegations of mortgage fraud when he said he fired her in August, and Cook has denied any wrongdoing.
But the Federal Reserve Act of 1935 prevents the president from removing any member of the Fed’s Board other than “for cause,” which is generally interpreted to mean negligence or malfeasance in the role.
If the court rules in favor of Trump, it could be a death knell for the Fed’s independence, raising fears of greater political influence over monetary policy and rattling global financial markets.
It could also lower the bar significantly for the White House to remove a Fed official who disagrees with the president on monetary policy.
“The greatest, immediate threat to the Federal Reserve is the Supreme Court. Full stop,” former Philadelphia Fed President Patrick Harker told a central banking forum last week. “If they decide against [Cook], in my mind, independence is gone because every president will use this as an opportunity (to oust officials) forever.”
A ruling in Trump’s favor would also give him a seat to fill on the Fed’s board, giving him another position to nominate this year.
Read more here.
