A woman holds a sign to support the Federal Reserve in front of the U.S. Supreme Court on January 21, 2026 in Washington, DC. (Alex Wong/Getty Images)
The Supreme Court on Wednesday appeared set to knock down President Donald Trump's attempt to fire Federal Reserve Governor Lisa Cook, as justices across the ideological spectrum voiced skepticism on the administration's case.
The two-hour oral argument session revolved around a narrow situation with outsized consequences: the president's ability to fire Fed governors at will. The high court must interpret what constitutes a "cause" for removal for the first time.
Up until now, no president has attempted to fire Fed officials since the central bank was established in 1913.
But Trump isn't like previous modern presidents. He's publicly and constantly railed against the Fed and its chair Jerome Powell for not moving quicker to lower interest rates. In late August, Trump attempted to fire Cook and alleged she committed mortgage fraud by submitting false information on applications to obtain cheaper loans. The events in question happened before former President Joe Biden nominated Cook to the Fed in 2022.
Cook refused to resign, and the Supreme Court decided in early October to allow her to continue to serve on the Fed's Board of Governors while the case plays out. Now the legal battle is poised to determine the executive branch's relationship to a central bank originally established by Congress to independently steer the economy through interest rates.
Solicitor General John Sauer opened arguments by reiterating the administration's argument that Cook committed fraud and that was enough grounds for her removal. He also said federal courts don't have jurisdiction to review what constitutes "cause" for firing a Fed member, while the president alone can decide it.
Notably, Justice Brett Kavanaugh, a conservative, didn't seem sold on Sauer's arguments.
"Your position that there's no judicial review, no process required, no remedy available, very low bar for cause — that the president alone determines — and that would weaken, if not shatter, the independence of the Federal Reserve," Kavanaugh said.
Sauer's points also drew skepticism from Chief Justice John Roberts, another conservative on the high court. He asked whether the case was rooted in a "devious way to get a better interest rate."
Paul Clement, Cook's lawyer, argued siding with the administration would turn Fed officials into employees with little protection, an outcome that wasn't intended by Congress. It may "only be recognized as at-will employment, no procedural due process before removal, no judicial review after removal, no preliminary injunction to preserve the status quo."
Liberal and conservative justices alike appeared to believe the case shouldn't have been fast-tracked by the Trump administration. A final ruling in the case is expected by early summer.
Powell, a prominent target of Trump's criticism, attended the court's oral arguments. Cook issued a statement shortly after the arguments concluded. "For as long as I serve at the Federal Reserve, I will uphold the principle of political independence in service to the American people," she said.
