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The Supreme Court pressed lawyers for the Trump administration Wednesday over the president’s effort to fire Federal Reserve Governor Lisa Cook, a consequential case that could profoundly impact the nation’s central bank, and the degree of influence wielded by the commander-in-chief.
Justices signaled some degree of wariness towards the arguments made by U.S. Solicitor General D. John Sauer on Wednesday. Sauer spent his time asserting that President Donald Trump has broad discretion to fire Cook from the Fed’s board of governors — without notice and largely without the ability for courts to challenge the “for cause” provision underpinning her removal.
Americans “should not have their interest rates” determined by a Federal Reserve governor whom he said has been “grossly negligent” in her own life, Sauer said, in a nod to the mortgage fraud allegations made against Cook last summer, and which Trump cited as the basis for firing Cook.
No charges have been brought against her to date, and Cook’s attorneys have blasted the allegations as “manufactured charges” designed to create a pretext for her removal.
The justices seemed inclined to allow Cook the ability to challenge her removal, likely in a lower court, though the specifics of how they might order that and when remain unclear.
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Chairman of the U.S. Federal Reserve Jerome Powell speaks with Lisa Cook, member of the Board of Governors of the Federal Reserve, at the Federal Reserve Board building in Washington, D.C., on June 25, 2025. (Saul Loeb/AFP/GettyImages)
But the arguments advanced by the Trump administration, and the broad assertions of executive privilege, appeared to find little sympathy with the high court — including Trump’s own appointees, who indicated that the Fed should be entitled to a higher reviewability standard than other independent federal agencies.
Concerns that the case is “undercooked” or lacking in procedure are largely due to the fact that Trump officials appealed the lower court’s order directly to the high court last fall for emergency intervention. The high court then took the rare step of ordering oral arguments to more fully consider the case before determining how to proceed.
Lisa Cook’s lawyer, Paul Clement, noted that they could remand the matter back to the U.S. Court for the D.C. Circuit to be heard on its merits. “I think that would be a very simple way to decide this case,” Clement told the justices.
He also stressed the independence and uniqueness of the Fed, describing it as a “uniquely structured” and “quasi-private entity” that affords it certain additional protections. So far, this has been the distinguishing factor separating Cook’s case from the firing of the Federal Trade Commissioner Rebecca Slaughter, and from National Labor Relations Board (NLRB) and Merit Systems Protection Board (MSPB) members last year.
At a minimum, Clement argued, Trump should be required to provide three things to Cook to satisfy due process requirements: Prior notification of the allegations that were made against her, the opportunity to present evidence rebutting or responding to the allegations, and the involvement of a decision-maker in who hasn’t “pre-judged” the case.
Clement reiterated on Wednesday his view that Trump pre-judged the issue, which he said was indicated by Trump’s social media post in August demanding that Cook “resign” or “be fired.”
There is “no rational reason to go through all the trouble of creating a unique, quasi-private entity” such as the Fed, Clement said, if its purpose is only to give it a “removal restriction that is as toothless” as Trump imagines.
“There is simply no reason to abandon 100 years of central-bank independence on an emergency application,” he added.
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Federal Reserve Board Chairman Jerome Powell in Washington, D.C. (Win McNamee/Getty Images)
Justices spent most of the time pressing Sauer on the specifics of Cook’s alleged conduct, and the notion of “for cause” removal. Justices Samuel Alito and Sonia Sotomayor seemed especially concerned about the reviewability.
They noted that, but for the high court’s emergency intervention allowing Cook to remain in her post for now, she would have been removed from the Fed before the basis for her removal was properly established in court.
Justices Amy Coney Barrett and Neil Gorsuch posited that Trump could call Cook to the White House and “sit down across the table in the Roosevelt Room” to allow for the most informal conversation that would still allow Cook to defend herself.
“The president could provide Ms. Cook with the evidence, and wait to see what the evidence is, and give her a chance to defend herself,” Barrett said. “It just would not be that big of a deal, it seems, if that’s enough.”
Sauer, in response, said that the Trump administration would consider that an “intrusion on the executive branch, which he said has the power to dictate what procedures” are relevant.
“Adequate process was already provided,” Sauer told Barrett.
Federal Reserve governor Lisa Cook and attorney Abbe Lowell, arrive at the Supreme Court in Washington, Wednesday, Jan. 21, 2026. (Mark Schiefelbein/AP Photo)
Justice Brett Kavanaugh, meanwhile, stressed the importance of balancing Cook’s conduct and the independence of the Fed. “It’s less important that the president have full faith in every single governor, and it’s more important that the markets and the public have faith in the independence of the Fed from the president and from Congress,” he said.
Lawyers for the Trump administration argued that Trump’s removal protection powers are discretionary, and argued that Trump should have broad reviewability powers on Wednesday.
Asked by Chief Justice John Roberts whether the “determination of cause is unreviewable” in Cook’s case, Sauer appeared to agree.
There’s “judicial review kind of at the outer perimeters of cause,” Sauer said, but otherwise “there would be deference to the president.”
Lawyers for the Trump administration asked the high court last year to stay a lower judge’s ruling that blocked Trump from immediately firing Cook from her post on the Federal Reserve’s Board of Governors until the court could consider a lawsuit she filed challenging her removal.
The Supreme Court agreed to take up the case in October, but allowed Cook to remain in her post pending review — marking a rare instance in which justices on the conservative-majority court have rejected the administration’s request for emergency intervention, and indicating their concerns about the Fed more specifically.
That near-term ruling could be due in part to the novelty of the case: If successful, Trump’s removal of Cook would mark the first time that a president has ever fired a sitting Fed governor in the bank’s 112-year history.
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President Donald Trump speaks to Fed Chair Jerome Powell during a tour of the Federal Reserve in Washington, D.C., Thursday, July 24, 2025. (Official White House Photo by Daniel Torok)
It also comes as tensions between Trump and the Fed have soared to a fever pitch.
Her lawyers argued in court Wednesday that Trump’s attempt to fire her is “unprecedented and illegal,” and a thinly veiled effort by Trump to wrest control over the Fed.
Justices will now have the option to either review the case narrowly — ruling only on whether it should leave the lower court’s ruling in place — or to bring into the fold the larger constitutional questions that the case has brought to the fore, including the legality of Trump’s effort to fire Cook under the Federal Reserve Act and other similar laws designed to insulate the bank from political pressures.
Justices of the U.S. Supreme Court in the House Chamber for a State of the Union address at the Capitol in Washington, D.C., on March 7, 2024. (Julia Nikhinson/Bloomberg via Getty Images)
Though Trump administration officials have insisted that the case is narrowly focused on Cook’s removal, the oral arguments as a whole will be scrutinized by major players in financial markets, including investors, bankers, and business owners for signs as to how the high court might rule.
The short-term ripple effects could be felt sooner than later, with the next Federal Open Market Committee meeting slated for later this month.
It also comes as Trump has repeatedly blasted Fed Chair Jerome Powell and other members of the central bank over its reluctance to lower benchmark interest rates as aggressively as he would like, deepening the fast-growing fault lines that have routinely pitted Trump against Fed leaders.
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Powell said that the agency was subpoenaed by the Justice Department last week over allegations that he lied to Congress about the costs of a massive renovation of its headquarters.
“Put simply, the president may reasonably determine that 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 apparent misrepresentations,” Sauer told the Supreme Court in appealing the case.
