Powell says Cook Supreme Court case is the most important in the Fed's 113-year history

• Supreme Court justices appeared skeptical of Trump's claims he could remove Cook, raising concerns about the precedent for Fed independence
• Powell is separately facing a criminal investigation over Fed headquarters renovations, which observers have connected to Trump's criticism of his interest rate policies
• Powell's term as Fed chair ends in May 2026, and he advised his successor to avoid being 'pulled into elected politics'

Summary: Powell Defends Supreme Court Appearance in Historic Fed Independence Case

Federal Reserve Chair Jerome Powell publicly defended his controversial decision to attend Fed Governor Lisa Cook's Supreme Court hearing, calling it "perhaps the most important legal case in the Fed's 113-year history."

Key Facts:

• Powell attended the Supreme Court hearing for Governor Lisa Cook, who President Trump attempted to remove from her position
• Trump cited mortgage fraud allegations as grounds for removal, though critics link the move to his push for lower interest rates
• Treasury Secretary Scott Bessent criticized Powell's attendance as "inappropriate," claiming it politicized the case
• Supreme Court justices appeared skeptical of Trump's authority to fire Cook and expressed concerns about Fed independence
• Powell currently faces a criminal investigation related to Fed headquarters renovations
• Powell's term as Fed Chair ends in May 2026

Market Implications:

The case has significant implications for Federal Reserve independence, with concerns that presidential removal power could allow political control over monetary policy. Powell emphasized that central bank independence is a "common practice" across all advanced democracies and warned that losing this separation would make it "hard to restore the credibility of the institution."

Key Quote:

Powell advised his potential successor: "Don't get pulled into elected politics. Don't do it."

The combination of Trump's attempted removal of Cook and the investigation into Powell has heightened fears about threats to the Fed's political independence, which Powell stressed is crucial for maintaining institutional credibility rather than protecting policymakers personally.