Supreme Court appears likely to keep Lisa Cook on Fed Reserve, defying Trump

An appeals court previously ruled in favor of Cook, who was nominated to the Fed by former President Joe Biden in 2022.

Despite the Trump Administration attempting to use the Supreme Court to unseat Lisa Cook from the Federal Reserve, it appears likely the Court is not only looking to side with Cook over her firing from the Fed last summer, but also to side with her.

During a two-hour argument on Wednesday (Jan. 21), many conservative judges on the court joined their liberal counterparts as Cook’s lawyers argued that her dismissal would create “chaos” in the markets and destroy the central bank’s independence from White House politics. In recent months, Trump has targeted Fed Chair Jerome Powell, even though he appointed Powell to the position during his first term.

Brett Kavanaugh, who was appointed to the Supreme Court during Trump’s first term, argued about the consequences of creating such a precedent by firing Cook, suggesting that if a Democratic president wanted to fire Trump appointees, they could likely do so if the Court agreed with Trump’s firing of Cook “for cause” over accusations of mortgage fraud.

Cook has repeatedly denied the claims.

“What goes around comes around,” Kavanaugh told US Solicitor General D. John Sauer. “Once these tools are unleashed, they’re used by both sides.”

Should the justices agree on a narrow ruling, it is likely the case would return to them within a year.

Last September, a federal appeals court ruled in favor of Cook, who was appointed to the Fed Reserve during the Biden Administration in 2022. To date, no president has fired the Federal Reserve’s governor in the agency’s 112-year history.

In court, Trump’s lawyers argued that courts have no power to regulate some of his moves. However, that argument did not seem to appeal to the Court justices, who disagreed that the Court had no role in removing Cook or any other Fed member.

“Your position that there’s no judicial review, no process required, no remedy available, very low bar for ‘cause’ – that the president alone determines – I mean that would weaken, if not shatter, the independence of the Federal Reserve,” Kavanaugh told Sauer.

It remains unclear how long the Court may take to rule in the case, as its ruling will no doubt affect both the White House and the markets. The court is still scheduled to hear a case regarding Trump’s use of emergency tariffs.