AP Source: Fed Chair Powell to attend Supreme Court argument on Cook case

Federal Reserve Chair Jerome Powell plans to make a rare appearance at the Supreme Court on Wednesday as the justices hear arguments in a case involving President Donald Trump’s unprecedented attempt to remove Fed governor Lisa Cook from her position.

Powell’s attendance signals a significant show of solidarity with Cook, who was appointed by former President Joe Biden and targeted for removal by the Trump administration in late August. The case represents an extraordinary challenge to the traditional independence of the Federal Reserve Board of Governors, whose members typically serve 14-year terms regardless of changes in presidential administration.

The Fed chair’s planned attendance comes just days after he took the extraordinary step of publicly denouncing the Trump administration’s legal threats against the central bank. In a video statement released on January 11, Powell revealed that the administration had issued subpoenas to the Federal Reserve, which he characterized as “pretexts” for Trump’s efforts to pressure the Fed into making aggressive interest rate cuts.

“These actions represent an unprecedented challenge to the Federal Reserve’s independence,” a former Fed official with knowledge of the situation told reporters. “The central bank’s ability to make monetary policy decisions free from political pressure is considered essential to economic stability.”

The Supreme Court case centers on fundamental questions about presidential power and the unique status of Fed governors, who occupy a rare position in the federal government structure. Unlike most executive branch appointees who serve at the president’s pleasure, Fed governors are granted extended terms specifically to insulate monetary policy decisions from political influence.

Financial markets have been closely monitoring developments in this case, as any successful effort to remove a Fed governor for political reasons could potentially undermine confidence in U.S. monetary policy. The uncertainty comes at a sensitive time for the economy, as the Federal Reserve has been gradually reducing interest rates following a period of aggressive hikes aimed at controlling inflation.

“What we’re seeing is an extraordinary test of institutional boundaries,” said Karen Shaw Petrou, managing partner at Federal Financial Analytics. “The independence of the Federal Reserve has been a cornerstone of U.S. economic policy since reforms following the Great Depression. This case could potentially reshape that relationship.”

The dispute between Trump and the Federal Reserve predates the current case. During his first administration, Trump frequently criticized Powell and the Fed for their interest rate policies, breaking with the tradition of presidents avoiding direct commentary on monetary policy decisions.

Cook, an economist with expertise in international finance and economic development, was confirmed to the Fed’s Board of Governors in May 2022. Her appointment was historic, as she became the first Black woman to serve as a Fed governor. Prior to joining the Fed, she served as a professor of economics and international relations at Michigan State University and held positions at the White House Council of Economic Advisers and the Federal Reserve Bank of Minneapolis.

Legal experts suggest the case could have implications far beyond the Federal Reserve, potentially affecting the structure of other independent agencies across the federal government.

The Supreme Court’s decision, expected later this year, will likely address fundamental questions about presidential authority and the constitutional separation of powers that underpin the American system of government.