Supreme Court appears poised to reject Trump’s attempt to immediately fire a Fed governor

Rep. Maxine Waters (D-Calif.) is joined by fellow House Democrats as she speaks to reporters outside the Supreme Court in Washington on Wednesday, Jan. 21, 2026. The court was hearing a case on Wednesday that could have enormous consequences for the economy and presidential power: how much discretion President Donald Trump has to fire a member of the Federal Reserve board. (Kenny Holston/The New York Times)

By ANN E. MARIMOW

The Supreme Court on Wednesday seemed poised to reject President Donald Trump’s bid to immediately remove Lisa Cook from the Federal Reserve Board, with key justices expressing concern about undermining the long-standing independence of the central bank.

Justices from across the ideological spectrum questioned whether the allegations President Donald Trump lodged against Cook — an unproven assertion that she engaged in mortgage fraud before taking office — were serious enough to allow the president to fire her.

They suggested it was premature for the court to resolve the case when there were still factual disputes over those allegations, and they sounded skeptical that Cook had received sufficient notice of Trump’s accusations and an opportunity to respond.

After about two hours of argument, a majority of the justices seemed likely to order additional proceedings, perhaps in the lower courts, meaning the Supreme Court’s ruling may not be the final word in the case. But if the justices agree to allow Cook to keep her job in the meantime, the result would be that the president’s effort to reshape the Fed would be frozen for now.

The court’s conservative majority has repeatedly allowed Trump to oust leaders of other independent agencies as he moves to expand presidential power and seize control of the federal bureaucracy. But the justices have signaled that the Fed may be different and uniquely insulated from executive influence because of its structure and history.

Key justices sharply questioned the Trump administration’s lawyer about the implications of the president’s position for the independence of the Fed and the economy.

Justices Brett Kavanaugh and Amy Coney Barrett, who are often in the majority, noted that former Fed chairs and Treasury secretaries had warned against allowing the president to immediately remove Cook.

Accepting the president’s view, Kavanaugh said, would “weaken, if not shatter, the independence of the Federal Reserve,” he said, opening the door to future presidents trying to dismiss officials at the Fed “at will.”

The justices agreed to hear Cook’s case on an expedited basis and are expected to rule in the coming weeks or months. The final outcome of the case could determine how much latitude presidents have to influence the direction of the powerful central bank, which Congress intentionally tried to insulate from political pressures.

The case lands as the administration has dramatically escalated its attacks on the Fed, apparently aimed at remaking its board and lowering interest rates. The Justice Department this month opened a criminal investigation into whether Fed Chair Jerome Powell lied to Congress about cost overruns related to the Fed’s renovation of its headquarters.

Powell, whose term as chair ends in May, forcefully pushed back on the threat of criminal charges, suggesting they were motivated by politics because the Fed set borrowing costs “based on our best assessment of what will serve the public, rather than following the preferences of the president.”

The investigation prompted a backlash from Republicans, international policymakers, Wall Street and some Trump allies, who warned that the central bank’s independence and credibility was at risk.

It also threatened to complicate Trump’s plans to name Powell’s replacement as chair — and, legal experts said, the Supreme Court case heard Wednesday.

Trump announced on social media in late August that he would fire Cook. He claimed that she had engaged in mortgage fraud involving loan documents she signed before joining the Fed in 2022. She has not been charged with or convicted of a crime, and she vigorously disputes the allegations.

Still, the president said that the allegations gave him sufficient “cause” to dismiss Cook under the federal law that established the Fed in 1913. Congress tried to ensure that Fed officials could set interest rates with the goal of attaining low, stable inflation and a strong labor market free from political pressure by setting 14-year terms for its leaders, known as governors, and only allowing presidents to remove them for “cause.”

Among the key questions before the justices: how much discretion a president has to fire Fed officials, what counts as cause, and what kind of notice and due process officials should have before a president can remove them.

The Trump administration is not challenging the constitutionality of the law establishing the Fed — distinguishing the case from one the justices heard in December that dealt with the president’s ability to fire other independent regulators. But the Justice Department said the courts cannot second-guess a president’s justifications or reinstate a fired official.

“The president identified a valid cause for removing Cook: apparent fraud or gross negligence in a financial matter, which created a grave appearance of impropriety in her governance of American’s financial matters,” D. John Sauer, the solicitor general, wrote in a court filing.

In response, Cook’s legal team said a person’s private conduct before he or she took office cannot be cause for removal, and that Trump’s stated reason for removing her was a “pretext” for policy disagreements. If any cause counts as cause, the team said, that is essentially the same as saying a president can remove a governor at will, which would eviscerate the central bank’s independence.

Cook’s attorney Abbe Lowell provided a detailed response to the allegations in a November letter to the Justice Department and accused the administration of targeting the president’s perceived enemies. He acknowledged that Cook had improperly written that a Georgia apartment would be a primary residence in a 2021 mortgage application. But he wrote the notation was “plainly innocuous” because of other documents she submitted where she provided more specific disclosures about the property’s use as a vacation home.

“There is no fraud, no intent to deceive, nothing whatsoever criminal or remotely a basis to allege mortgage fraud,” Lowell wrote in November.