US Supreme Court considers Trump's bid to fire Fed's Lisa Cook

• Trump seeks to overturn rulings by a district judge and appeals court that blocked Cook's firing, with the judge finding the unproven allegations likely were a pretext to remove her over monetary policy disagreements
• Cook, appointed in 2022 as the first Black woman Fed governor with a term through 2038, helps set US monetary policy as Trump pressures the Fed to cut interest rates more aggressively
• The case threatens Fed independence established since 1913, as the Federal Reserve Act requires governors be removed only 'for cause' without defining the term, while Trump has also opened an ethics probe into Fed Chair Jerome Powell

Summary: US Supreme Court Considers Trump's Bid to Fire Fed Governor Lisa Cook

The U.S. Supreme Court is set to hear arguments on January 21, 2026, regarding President Donald Trump's unprecedented attempt to fire Federal Reserve Governor Lisa Cook—the first such removal effort since the Fed's creation in 1913.

Key Facts:

• Trump attempted to fire Cook on August 25, 2025, via social media, citing unproven mortgage fraud allegations from before her Fed tenure
• Lower courts blocked the removal: U.S. District Judge Jia Cobb ruled in September that Trump's action likely violated Cook's Fifth Amendment due process rights
• Cook's term extends to 2038; she was appointed in 2022 by President Biden as the first Black woman Fed governor

Legal Framework:

The Federal Reserve Act requires governors be removed only "for cause," though the term remains undefined. Cook argues the allegations are a pretext for disagreements over monetary policy, as Trump has pressured the Fed to cut interest rates faster and criticized Chair Jerome Powell.

Market Implications:

The case represents the most significant challenge to Fed independence in over a century. The outcome could fundamentally alter the central bank's ability to set interest rates without political interference—critical for inflation control and economic stability. The Supreme Court's 6-3 conservative majority previously supported Trump on various emergency matters but signaled the Fed's "unique structure and historical tradition" may warrant special consideration.

Additional Context:

The administration has also opened an investigation into Powell over congressional testimony about a Fed building project. Powell plans to attend Wednesday's oral arguments, underscoring the case's gravity for central bank independence.