Supreme Court seems inclined to keep Lisa Cook on Fed board despite Trump attempt to fire her

The Supreme Court appeared reluctant Wednesday to support former President Donald Trump’s attempt to remove Federal Reserve Governor Lisa Cook from her position, signaling a likely preservation of the central bank’s independence from political interference.

During nearly two hours of arguments, at least six of the nine justices, including Trump appointee Brett Kavanaugh, expressed skepticism about the unprecedented effort to fire a sitting Fed governor. Both Cook and Federal Reserve Chairman Jerome Powell attended the proceedings in the packed courtroom.

“Allowing Cook’s firing to go forward would weaken, if not shatter, the independence of the Federal Reserve,” Justice Kavanaugh remarked during the session, highlighting the gravity of the case.

No president has dismissed a Federal Reserve governor in the institution’s 112-year history. The central bank was deliberately structured to operate independently of political pressure, a principle Cook reaffirmed after the hearing.

“For as long as I serve at the Federal Reserve, I will uphold the principle of political independence in service to the American people,” Cook said in a statement following the arguments.

The case carries significant implications for U.S. monetary policy and financial markets. Critics argue Trump’s true motivation is to gain control over interest rate decisions by replacing Cook, who is the first Black woman to serve as a Federal Reserve governor, with his own appointee. This would potentially give him a majority on the Fed’s seven-member board.

Trump has openly criticized the Federal Reserve’s cautious approach to rate cuts. Speaking earlier Wednesday in Davos, Switzerland, he advocated for dramatic reductions, stating the United States should pay “the lowest interest rate of any country in the world.” While the Fed cut rates three times in late 2025, the pace has been slower than Trump desires, with indications that rates may remain stable in coming months due to inflation concerns.

The Supreme Court is specifically considering whether Cook can remain in her position while her challenge to the firing proceeds through the courts. Lower courts have allowed her to continue serving during the legal proceedings.

Chief Justice John Roberts, who also appeared skeptical of Trump’s actions, suggested it might be more efficient for the high court to issue a definitive ruling rather than sending the case back to lower courts.

The dispute has escalated beyond Cook’s case. The Justice Department has opened a criminal investigation of Powell and served subpoenas to the central bank. Powell took the unusual step of publicly responding, characterizing the threat of criminal charges as “pretexts” masking Trump’s frustration over interest rate policy. The Justice Department has claimed the investigation concerns Powell’s congressional testimony about Fed building renovation costs.

Unlike previous cases where Trump sought to fire agency heads at will, this case hinges on specific allegations. Trump’s Solicitor General D. John Sauer argued that Cook committed mortgage fraud by claiming two properties—in Michigan and Georgia—as “primary residences” in mortgage applications filed in June and July 2021, before her Fed appointment. Such designations typically allow for lower mortgage rates and smaller down payments.

Sauer characterized these applications as evidence of “gross negligence at best” justifying her removal. He further argued that courts should not review the president’s decision and that Cook has no right to a hearing.

Cook has vigorously denied any wrongdoing and faces no criminal charges. Her attorney, Abbe Lowell, wrote to Attorney General Pam Bondi in November, stating: “There is no fraud, no intent to deceive, nothing whatsoever criminal or remotely a basis to allege mortgage fraud.” Lowell explained that Cook had specifically identified her Atlanta condo as a “vacation home” in a May 2021 loan estimate and as a “2nd home” in a security clearance form.

The Supreme Court has previously signaled its cautious approach to Federal Reserve independence, describing it as “a uniquely structured, quasi-private entity.” Financial analysts are closely monitoring the case, concerned about potential market instability should the court unexpectedly allow political interference in monetary policy decisions.

The court’s ruling could either reinforce the long-established independence of the Federal Reserve or open a new chapter of political influence over an institution designed to remain insulated from the electoral cycle.