Federal Reserve Governor Lisa Cook’s job appeared safe from firing by President Donald Trump after Supreme Court justices on Wednesday questioned Trump administration lawyers skeptically about the reasons for Cook’s possible firing and its impact on the Fed’s historic independence.
Judge Brett Kavanaugh warned Attorney General D. John Sauer of the implications of his argument that Trump could fire Cook or other Fed governors “for cause” — but without judicial review of whether the alleged cause of the alleged mortgage fraud was legitimate.
“Their position that there is no judicial review, no required process, no available remedies, very low bar for good cause – which the president alone determines – and that would weaken, if not destroy, the independence of the Federal Reserve,” said Kavanaugh, one of the court’s six conservatives.
Cook, who was in the courtroom Wednesday, sued Trump in September, contesting the president’s alleged authority to summarily remove her from office over unindicted allegations that she committed mortgage fraud.
“The real question is to what extent do we believe the public will be harmed by allowing Ms. Cook to remain in office during the pendency of this case?” Judge Ketanji Brown asked Jackson, referring to Cook’s lawsuit, which remains pending in federal district court. Jackson is one of three liberal members of the court.
Sauer responded: “We represent a serious, irreparable harm to the public perception of the Federal Reserve’s approval.” [Cook] remain in office”
Jackson asked, “Do you have any evidence other than the president’s view?”
Another conservative justice, Samuel Alito, expressed skepticism about how quickly Cook was fired by Trump after one of his appointees publicly made an allegation against Cook
“Is there a reason why this whole matter had to be handled by everyone, by the executive branch, by the district court, by the D.C. Circuit? [Court of Appeals] “In such a hurry?” Alito asked.
“When the matter came before the executive branch, it was handled very perfunctorily,” said Alito, who usually sides with the Trump administration on key legal issues.
Paul Clement, who represented Cook at the hearing, based his arguments on language the Supreme Court used in an opinion last year to describe the Fed as different from other federal agencies whose officials could be removed by a president.
The court had described the Fed as a “uniquely structured, quasi-private entity.”
“There is no rational reason to go to the trouble of creating this unique, quasi-private entity that is exempt from everything from the appropriations process to public service laws, only to give it a distance restriction that is as toothless as the president imagines,” Clement said.
“But if this removal restriction has real, substantive, procedural merit, then this emergency motion should be denied,” Clement said, referring to the Trump administration’s request that the Supreme Court allow Cook’s removal for now.
At stake is not only the fate of Cook – who denies any wrongdoing – but also potentially the Fed’s future independence in setting monetary policy, without the risk that a president can easily remove a governor who fails to do his bidding on the issue.
This is underscored by Fed Chairman Jerome Powell’s recent disclosure that the U.S. Attorney’s Office in Washington, DC, has opened a criminal investigation against him in connection with his oversight of a multibillion-dollar renovation of the central bank’s headquarters there.
Powell, who attended the debates, said the real reason for the investigation was that the Fed kept interest rates stable for much of last year, to Trump’s anger.
Cook was one of the Fed governors who supported Powell in maintaining these interest rates.
“This case is about whether the Federal Reserve sets interest rates based on evidence and independent judgment or caves to political pressure,” Cook said in a statement after the hearing.
“Research and experience show that the independence of the Federal Reserve is critical to fulfilling the Congressional mandate of price stability and maximum employment,” she said. “That’s why Congress has chosen to protect the Federal Reserve from political threats while holding it accountable for carrying out that mission.”
Federal Reserve Governor Lisa Cook and US President Donald Trump.
Ting Shen | Bloomberg | Getty Images | Jonathan Ernst | Reuters
When Trump fired Cook in late August – the first time a president had attempted such a move – there was immediate speculation that it was because of her refusal to agree to Trump’s desired rate cut.
If Cook and Powell were removed from the Fed’s seven-member board, Trump would be able to appoint the majority of that board – and at least in theory would have more influence over interest rate decisions.
Trump didn’t mention Cook’s stance on interest rates when he said he would fire her.
Instead, the president pointed to allegations from Federal Housing Finance Director Bill Pulte that she provided false information when applying for home mortgages, even before her appointment to the Fed by then-President Joe Biden in 2022 to fill an unexpired term on the board.
Cook, the first Black woman to serve on the Fed board, was reappointed by Biden in 2023 to a full 14-year term.
Under the Federal Reserve Act of 1913, only the president can fire a Fed board member, and a governor like Cook can only be fired “for cause.”
The law does not specify in detail what would constitute “cause,” but historically “cause” has been understood to mean wrongdoing or dereliction of duty.
After Cook sued Trump to prevent her from leaving the Fed, a federal district court judge in Washington ruled that she could remain at the central bank pending the outcome of her lawsuit.
Judge Jia Cobb wrote in that ruling: “Cook has clearly demonstrated that her alleged removal occurred in violation of the “for cause” provision of the Federal Reserve Act.”
Cobb said the “best reading” of this provision is that the alleged reason for removal is related to a governor’s actions during his “term in office.”
The allegations against Cook relate to actions she took before joining the Fed.
The Justice Department appealed Cobb’s ruling, but was unsuccessful. The DOJ then asked the Supreme Court to take the case.
In a filing, the DOJ said the “determination of cause” for termination is “subject to the non-reviewable discretion of the President.”
“In any event, the President has identified sufficient cause here,” the filing says.
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“That the Federal Reserve Board plays a uniquely important role in the American economy only increases the government’s and the public’s interest in ensuring that an ethically compromised member does not continue to exercise its enormous powers,” the filing said
“Simply put, the President may reasonably decide that the interest rates paid by the American people should not be set by a governor who appears to have lied about facts material to the interest rates she secured for herself – and refuses to explain the blatant misrepresentation,” the filing says.
A general view of the US Supreme Court as judges could issue at least one ruling in several key pending cases, including a decision on the legality of President Donald Trump’s sweeping global tariffs on January 20, 2026 in Washington, DC, USA.
Nathan Howard | Reuters
All three former living Fed chairs — Alan Greenspan, Ben Bernanke and Janet Yellen — along with a group of former Treasury secretaries, heads of the White House Council of Economic Advisers and others, signed a legal brief with the Supreme Court opposing Cook’s removal. Bernanke attended Wednesday’s hearing.
The letter said Congress “intentionally” designed the Fed to be a “uniquely independent entity, largely insulated from political pressures that might otherwise prioritize short-term economic gain over long-term stability and growth.”
“Granting the administration’s request to immediately remove Governor Cook from the board would gut these long-standing protections and the essential functions they serve,” the brief states. “This would expose the Federal Reserve to political influence, undermining public confidence in the Fed’s independence and endangering the credibility and effectiveness of U.S. monetary policy.”