Federal Reserve Chair Jerome Powell will personally attend Supreme Court arguments on Wednesday in a case that will determine whether President Donald Trump can remove a sitting Fed governor and change the balance of power inside the central bank.
It’s a rare step by a Fed chair, taken as Powell himself faces a criminal investigation by the Trump administration. It also comes as the court weighs how far a president can go in forcing changes at an independent institution.
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According to the Associated Press, Powell plans to be in the courtroom as the justices hear the government’s appeal in the case of Lisa Cook. Cook is a Fed governor whom Trump tried to fire last summer over allegations of mortgage fraud. Cook denies any wrongdoing, has not been charged, and remains on the board under a court order blocking her removal.
For the Fed, the case is about more than one seat. A ruling for Trump would allow him to replace Cook with an ally, create a majority of his appointees on the board, and give him new leverage over interest rates and bank regulation.
A test of presidential removal power
Trump moved to oust Cook in August, accusing her of falsifying loan documents before joining the Fed. Cook sued to block the removal, arguing that federal law allows presidents to dismiss Fed governors only “for cause” and that policy disagreements do not qualify.
A federal judge barred the firing. And an appeals court upheld the order.
Now the Supreme Court will decide whether Trump can remove Cook while the lawsuit is still pending. It will also rule on how much discretion a president has to define “cause” when targeting a central bank official.
Justice Department lawyers say the president cited a valid reason and that courts should not second-guess it. Cook’s lawyers argue the allegations are thin, unproven, and a pretext for retaliation over monetary policy.
Powell steps into the fight
Powell’s appearance Wednesday adds a new dimension to a case that had already become a direct test of the Fed’s independence.
Fed chairs almost never attend Supreme Court arguments in personnel disputes. Powell is not scheduled to speak, but his presence places the institution’s leadership openly behind Cook and raises the profile of the case inside the court.
It also comes as Powell’s relationship with the administration has shifted into open conflict.
Earlier this month, Powell disclosed that the Trump administration had issued subpoenas to the Fed and placed him under criminal investigation tied to a multi-billion-dollar renovation of the central bank’s headquarters. Powell said the probe was retaliation for refusing to cut interest rates as aggressively as Trump demanded.
“The threat of criminal charges,” Powell said in a January statement, “is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.”
Trump has argued rates should be closer to 1%. Powell oversaw three cuts late last year that lowered the benchmark rate to roughly 3.6%.
Who controls the central bank
If Trump prevails, he could replace Cook with a loyalist and gain effective control of the Fed board, reshaping monetary policy and bank regulation as interest rates remain central to the economy and the upcoming midterm elections.
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If Cook prevails, the court would preserve the legal barrier protecting Fed governors from political removal and keep the board insulated from presidential pressure.
Powell’s decision to appear suggests the Fed’s leadership believes the outcome will reach beyond the dispute.
It will decide whether a president can reach directly into the institution that sets the price of money.
