Federal Reserve governor Lisa Cook and attorney Abbe Lowell, arrive at the Supreme Court in Washington, Wednesday, Jan. 21, 2026. (Mark Schiefelbein/AP Photo)
The case comes before the Supreme Court on an emergency basis -- with the government seeking to dismiss Cook now, for as long as the courts decide the matter, a process that could last months.
The justices could decide the larger constitutional questions now or give the lower federal courts a chance for a full examination of the facts, with some guidance from the high court on the standards of "for cause" removal.
In arguments, most on the court seemed skeptical of Trump's actions.
"That's your position that there's no judicial review, no process required, no remedy available?" Justice Brett Kavanaugh asked Solicitor General D. John Sauer. "Very low bar for cause that the president alone determines. And that would weaken, if not shatter, the independence of the Federal Reserve."
"Let's talk about the real-world downstream effects of this. Because if this were set as a precedent, it seems to me just thinking big picture, what goes around, comes around," added Kavanaugh, who has typically been an ardent defender of executive power. "All the current president's appointees would likely be removed for cause on January 20th, 2029 -- if there's a Democratic president or January 20th, 2033. And then, we're really at, at will removal."
Others on the bench raised questions of "public confidence" if the president could fire Fed governors without fully explaining or justifying the reasons.
"We have amicus briefs from economists who tell us that if Governor Cook is" fired, asked Justice Amy Coney Barrett, "that it can trigger a recession. How should we think about the public interest in a case like this?"
Cook's lawyer told the nine-member bench court the Federal Reserve System was created by Congress in 1913 as a wholly independent entity, to insulate it from political influence, and from any one president "stacking the deck" with their own nominees.
The first Black female Fed governor claims to be a political pawn in Trump's very public efforts to dictate the board’s interest rate policies and by exploiting what she calls "manufactured charges" of wrongdoing.
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The Supreme Court building in Washington, D.C. (AP Photo/J. Scott Applewhite, File)
"Why are you afraid of a hearing?" asked Justice Amy Coney Barrett, at one point.
Justice Neil Gorsuch asked: "Let's, just suppose with me, hypothetically, for the moment, that the court read the act to require notice and a hearing ... What would that hearing look like?"
Gorsuch asked if the president could just call Cook into the White House Roosevelt Room. "So just a meeting across a conference table, finish with 'you're fired?'"
But Chief Justice John Roberts repeatedly said a hearing on the allegations would serve little use if her only defense is she made an "inadvertent error" on her mortgage application.
The public session also focused extensively on the standards of "cause" that would permit Cook's dismissal. Several justices suggested the mortgage fraud claims against Cook were not serious enough to trigger emergency action requested by the government to remove her at least temporarily.
Existing statutory removal protections include the so-called "INM standard" -- "inefficiency, neglect of malfeasance."
"The question becomes, is it grossly negligent to make a mistake on a mortgage application?" said Justice Sonia Sotomayor.
Justice Samuel Alito also asked why the case was handled "in such a hurried manner," suggesting concern the allegations against Cook have not been properly adjudicated, either by the courts or by the president himself.
In a statement after the hearing ended, Cook said her case is "about whether the Federal Reserve will set key interest rates guided by evidence and independent judgment or will succumb to political pressure."
The Federal Reserve Act (FRA) says the president can only remove members of the Fed board and FOMC "for cause." The exact parameters of that standard were not spelled out in the original law, and never fully tested in the courts.
Cook -- appointed for a 14-year term by former President Joe Biden in 2023 -- will remain on the job at least until the court decides the current legal questions.
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Lisa DeNell Cook is sworn in during a Senate Banking nominations hearing on June 21, 2023, in Washington. (Drew Angerer/Getty Images)
No president has fired a sitting Fed governor in the law’s 112-year history.
She strongly denies accusations of falsely claiming two homes in Georgia and Michigan as her primary residence to secure better mortgage terms. She has not been charged with any crime.
Cook sued the administration last August in a bid to keep her job.
Just after the court arguments ended, Cook released a statement saying her case is "about whether the Federal Reserve will set key interest rates guided by evidence and independent judgment or will succumb to political pressure."
The next Federal Open Market Committee (FOMC) meeting is scheduled for January 27 and 28, with an expected interest rate decision. Both Powell and Cook are each set to participate.
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Financial markets, private banks, businesses, and investors will be closely watching what the Supreme Court does in the Federal Reserve dispute, and a separate pending appeal over Trump's sweeping reciprocal global tariffs.
A written ruling in that import tax case, which was argued by the justices in November, could come at any time.
The Fed case is Trump v. Cook (25a312). A decision there could come relatively quickly within weeks, or potentially as late as June or early July.
Shannon Bream currently serves as anchor of FOX News Sunday. She joined the network in 2007 as a Washington D.C- based correspondent covering the Supreme Court.
https://www.foxnews.com/politics/supreme-court-appears-ready-keep-lisa-cook-federal-reserve-board-despite-trump-efforts-fire-her