Supreme Court warns Trump firing Federal Reserve governor may harm independence

The case centers on Trump’s attempt to fire Federal Reserve Governor Lisa Cook. During oral arguments, several justices questioned the administration’s position that the president can determine “cause” with minimal constraint and without meaningful judicial review. Justice Brett Kavanaugh warned that such an approach could weaken or “shatter” Fed independence by encouraging presidents to search for a rationale to remove monetary policymakers.

Solicitor General D. John Sauer, arguing for the administration, said Trump should be able to remove Cook over alleged misstatements made on mortgage applications before she joined the Fed. Cook, appointed in 2022 by former President Joe Biden to a term running until 2038, has said the allegations are a pretext tied to disagreements over monetary policy.

The dispute unfolds as Trump has repeatedly urged the Fed to cut interest rates faster and more aggressively than the central bank has been willing to do amid lingering inflation. Trump has said he plans to pick a new Fed chair when Jerome Powell’s term ends in May. Separately, the Justice Department opened a criminal investigation in January 2026 into Powell related to a renovation project for two historic buildings at the Fed’s Washington headquarters; Powell has characterized the probe as an effort to increase White House influence over monetary policy.

Justice Amy Coney Barrett asked how the court should weigh the public interest after economists warned in filings that allowing Cook’s removal could trigger a recession. Sauer pointed to a stock market rise after Trump announced Cook’s firing in August, but Barrett cautioned that judges are not in the business of forecasting markets.

A lower-court judge blocked Cook’s immediate removal, citing likely due process violations under the Fifth Amendment because the action occurred without notice or a hearing. The Supreme Court is considering the administration’s request to lift that order while Cook’s broader legal challenge proceeds. A ruling is expected by the end of June 2026.

As GNcrypto wrote on 20 January 2026, U.S. Treasury Secretary Scott Bessent said in Davos that President Donald Trump could announce his pick for the next Federal Reserve chair as soon as next week, with the shortlist narrowed to four candidates ahead of Jerome Powell’s term ending in mid-May 2026. The report noted that names discussed as possible successors have included White House economic adviser Kevin Hassett, former Federal Reserve governor Kevin Warsh, Federal Reserve Governor Christopher Waller, BlackRock senior bond strategist Rick Rieder, and Federal Reserve Governor Michelle Bowman.