WASHINGTON, Jan 21 (Reuters) — Conservative and liberal U.S. Supreme Court justices signaled skepticism on Wednesday toward President Donald Trump&#8217;s bid to fire Federal Reserve Governor Lisa Cook in a case with the central bank&#8217;s independence at stake.
During about two hours of arguments in the case, the justices indicated they were unlikely to grant the Trump administration&#8217;s request to lift a judge&#8217;s decision barring ​the Republican president from immediately firing Cook while her legal challenge continues to play out.
Some of the justices pressed D. John Sauer, the U.S. solicitor general arguing for Trump&#8217;s administration, about why Cook was not given a chance to formally respond to the unproven mortgage fraud allegations — which she has denied — that the president cited as justification to oust Cook. They also raised concerns about the effect on the economy of such a first-ever presidential firing from the central bank and the implications for the Fed&#8217;s cherished independence from political influence.
The case represents the latest dispute to come to the top U.S. judicial body involving Trump&#8217;s expansive view of presidential powers since returning to office 12 months ago.
When the court, which has a 6-3 conservative majority, agreed in October to hear the case, they left Cook in her job for the time being.
&#8220;This case is about whether the Federal Reserve will set key interest rates guided by evidence and independent judgment or will succumb to political pressure,&#8221; Cook, who attended the arguments, said in a statement afterward.
&#8220;For as long as I serve at the Federal Reserve, I will uphold the principle of political independence in service to the American people,&#8221; Cook added.
&#8216;DECEIT OR GROSS NEGLIGENCE&#8217;
Sauer told the justices that the allegations against Cook impugn her &#8220;conduct, fitness, ability or competence to serve as a governor of the Federal Reserve.&#8221;
&#8220;The American people should not have their interest rates determined by someone who was, at best, grossly negligent in obtaining favorable interest rates for herself,&#8221; Sauer said.
&#8220;Deceit or gross negligence by a financial regulator in financial transactions is cause for removal,&#8221; Sauer added, arguing that the allegations require immediate removal.
Cook has called the allegations against her a pretext to fire her over monetary policy differences as Trump heaps pressure on the central bank to cut interest rates and lashes out at Fed Chair Jerome Powell for not doing so more quickly.
Conservative Chief Justice John Roberts asked Sauer to explain whether his argument that Cook should be immediately removed applies if the basis of the mortgage allegations — that she cited two different properties as a principal residence — is an &#8220;inadvertent mistake contradicted by other documents in the record.&#8221;
Sauer responded that, even if Cook made a mistake on mortgage paper, &#8220;it is quite a big mistake.&#8221;
Roberts seemed skeptical, telling Sauer &#8220;we can debate that.&#8221;
Paul Clement, the lawyer arguing for Cook, told the justices that the allegations against Cook arise from &#8220;at most an inadvertent mistake&#8221; on a mortgage application concerning a vacation property.
Trump&#8217;s move against Cook is seen as the most consequential challenge to the Fed&#8217;s independence since it was formed in 1913. Until now, no president had sought to oust a Fed official.
A Supreme Court ruling is expected by the end of June.
&#8216;A MILLION HARD QUESTIONS&#8217;
Conservative Justice Samuel Alito expressed concern that the administration had handled the case &#8220;in a very cursory manner.&#8221; Though the case involves Trump&#8217;s asserted cause to fire Cook, Alito said, &#8220;No court has ever explored those facts.  Are the mortgage applications even in the record in this case?&#8221;
&#8220;There&#8217;s a million hard questions in this case,&#8221; Alito said.
In creating the Fed, Congress passed a law called the Federal Reserve Act that included provisions meant to insulate the central bank from political interference, requiring governors to be removed by a president only &#8220;for cause,&#8221; though the law does not define the term nor establish procedures for removal.
Clement told the justices that Trump&#8217;s position would transform tenure protections for Fed governors into &#8220;at-will employment.&#8221;
&#8220;That makes no sense,&#8221; Clement said. &#8220;There&#8217;s no rational reason to go through all the trouble of creating this unique, quasi-private entity that is exempt from everything from the (congressional) appropriations process to the civil service laws, just to give it a removal restriction that is as toothless as the president imagines.&#8221;
Roberts expressed doubts about Sauer&#8217;s arguments that the president&#8217;s assertion of a cause is not reviewable, or that judges cannot reinstate a fired officer.
Conservative Justice Brett Kavanaugh expressed doubts about the real-world effects of the administration&#8217;s arguments.
&#8220;Your position,&#8221; Kavanaugh told Sauer, &#8220;that there&#8217;s no judicial review, no process required, no remedy available, very low bar for cause that the president alone determines — I mean, that would weaken, if not shatter, the independence of the Federal Reserve.&#8221;
Conservative Justice Amy Coney Barrett also questioned why the Trump administration has denied Cook a hearing to defend herself, saying that it &#8220;would not have been that big of a deal&#8221; for Trump to sit down with Cook and lay out the alleged evidence against her.
Barrett also asked Sauer about the practical implications of allowing Trump&#8217;s firing of a Fed governor.
&#8220;We have amicus (friend-of-the-court) briefs from economists who tell us that if Governor Cook is (fired), that would trigger a recession. How should we think about the public interest in a case like this?&#8221; Barrett asked, adding: &#8220;If there is a risk (at this preliminary stage of the case) doesn&#8217;t that counsel caution on our part?&#8221;
Sauer said that Cook was notified in August of her termination, and that has not affected the markets. Sauer urged the justices to weigh the predictions of doom for the U.S. economy by economists in briefs submitted in the case supportive of Cook with a &#8220;jaundiced eye.&#8221;
U.S. District Judge Jia Cobb in September ruled that Trump&#8217;s attempt to remove Cook without notice or a hearing likely violated her right to due process under the U.S. Constitution&#8217;s Fifth Amendment. Cobb also found that the mortgage fraud allegations likely were not a legally sufficient cause to remove a Fed governor under the law, noting that the alleged conduct occurred before she served in the Fed post.
The U.S. Court of Appeals for the District of Columbia Circuit declined Trump&#8217;s request to put Cobb&#8217;s order on hold.
&#8216;YOU&#8217;RE FIRED&#8217;
Conservative and liberal justices alike posed sharp questions to Sauer on his contention that Cook was not entitled to formal notice and a hearing before removal by the president.
Conservative Justice Neil Gorsuch asked Sauer what such a hearing would look like and whether Cook would have a right to legal counsel. Sauer responded that the court in the past has been very reluctant to &#8220;dictate procedures to the president&#8221; and that it would be up for Trump to decide.
&#8220;Calling Ms. Cook into the (White House) Roosevelt Room, sitting across a conference table, listening for, I don&#8217;t know how long, how much evidence is a lawyer required, and then making a decision? Could that suffice?&#8221; Gorsuch asked, adding: &#8220;Just a meeting across a conference table finished with, &#8216;You&#8217;re fired&#8217;?&#8221;
Conservative Justice Clarence Thomas asked Sauer on what basis should the justices conclude that the Fed is &#8220;an executive branch agency and hence that the president does have a removal authority.&#8221;
&#8220;There&#8217;s an academic dispute about whether or not the Federal Reserve&#8217;s Open Market operations constitute executive power or something else, essentially private conduct. However, Congress has over the years kind of packed on traditional executive powers on the Federal Reserve,&#8221; Sauer replied.
As a Fed governor, Cook helps set U.S. monetary policy with the rest of the central bank&#8217;s seven-member board and the heads of the 12 regional Fed banks. Her term in the job runs to 2038. Cook was appointed in 2022 by Democratic former President Joe Biden as the first Black woman to serve in the post.
Liberal Justice Ketanji Brown Jackson pressed Sauer to reconcile two seemingly conflicting positions: his claim the president has broad discretion to remove a Fed governor and his recognition that Congress included tenure protections for Fed governors to shield the Fed&#8217;s independence from White House interference.
&#8220;How does that further the aims of the statute?&#8221; Jackson asked.
Alito voiced skepticism toward Clement&#8217;s argument that a Fed governor&#8217;s conduct before taking office cannot provide a basis for removal by the president, asking Cook&#8217;s attorney to address a series of increasingly egregious hypothetical scenarios.
&#8220;How about if, after the person assumes office, videos are disclosed in which the office holder is expressing deep admiration for Hitler or for the Klan?&#8221; Alito asked.
AGENCY INDEPENDENCE
In prior cases, the Supreme Court chipped away at the independence of various federal agencies from presidential control, and could soon overrule a key precedent that has shielded the heads of independent agencies from removal since 1935.
But the court last year signaled it may view the central bank as an exception, noting in a May ruling that let Trump remove two Democratic members of federal labor boards that the Fed possesses a unique structure and historical tradition.
The Supreme Court has backed Trump in a series of emergency rulings since he returned to the presidency on immigration, mass federal layoffs, cutting foreign aid, dismantling the Education Department and other matters.
The president sought to fire Cook on August 25 by posting a termination letter on social media citing the mortgage fraud allegations disclosed by Federal Housing Finance Agency Director Bill Pulte, a Trump appointee.
The administration ‍this month opened a criminal investigation into Powell over remarks he made to Congress last year about a Fed building project, a move he similarly called a pretext aimed at gaining influence over monetary policy.
(Reporting by Andrew Chung; Additional reporting by Jan Wolfe, John Kruzel and David Lawder in Washington and Ann Saphir in San Francisco; Editing by Will Dunham)

<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<script async src="https://www.tiktok.com/embed.js"></script>
<script async src="https://www.instagram.com/embed.js"></script><div data-widget-host="revcontent" data-pub-id="165152" data-widget-id="290588"></div><script src="https://delivery.revcontent.com/165152/290588/widget.js"></script>

Supreme Court Appears Reluctant To Let Trump Fire Fed’s Lisa Cook

CONTINUE READING

Trump To Congress: You Run The Kennedy Center

Trump Weighs AI Oversight Order As MAGA Allies Sound Alarm

Disgraced Hollywood Mogul’s Latest Rape Trial Ends Without Verdict

Republicans Move To Wipe Out Democrat Seats In Louisiana, South Carolina

Chinese Agent Found Guilty In NYC ‘Secret Police Station’ Case

Tariff Ruling Faces Pushback As Trump Blasts ‘Radical Left Judges’

News

Donald Trump

Federal Reserve

Supreme Court

A video goes viral showing a baby being refused his mother by two gay "dads". This is just the tip of the iceberg, which is why we will have an important discussion today about surrogacy. 

Hour 1

The Matt Walsh Show

Ep. 1765 - This Video Is One Of The Worst Things I've Seen In A Long Time 

The Strait of Hormuz officially opens for business (kind of), the Pope makes “shocking” comments on immigration, and President Trump promises UFO disclosure at TPUSA. 


The Michael Knowles Show

Ep. 1956 -  Pope Leo's "SHOCKING" Immigration Comments EXPLAINED

A false miscreed has corrupted our leadership class.


The Andrew Klavan Show

Ep. 1275 - Dumb, Dumber and Progressive

President Trump announces a 10-day ceasefire between Lebanon and Israel, a murder-suicide involving former Democratic Lieutenant Governor Justin Fairfax shakes Virginia, and France and Britain hold a conference to secure the Strait of Hormuz – after the Iranian conflict ends. Get the facts first with Morning Wire.

- - -

Ep. 2738

- - -

Wake up with new Morning Wire merch: https://bit.ly/4lIubt3

- - -

Today's Sponsors:

Alliance Defending Freedom - Visit https://JoinADF.com/WIRE or text 'WIRE' to 83848 to learn more.

Pocket Hose - Text MORNING to 64000 to get a FREE pocket pivot and their 10-pattern sprayer with the purchase of ANY size Copper Head hose. Message and data rates may apply.

Morning Wire

U.S. Expands Hormuz Blockade & VA Fairfax Deaths Investigated | 4.17.26

U.S. Expands Hormuz Blockade & VA Fairfax Deaths Investigated | 4.17.26 [Member Exclusive]

A ceasefire goes into effect between Israel and Lebanon, a tragic murder-suicide rocks Virginia, and Dairy Queen deploys AI in the drive-thru. Get the facts first with Evening Wire.
- - -
Ep. 2737
- - -
Wake up with new Morning Wire merch: https://bit.ly/4lIubt3 
- - -
Today’s Sponsor:

Alliance Defending Freedom - Visit https://JoinADF.com/WIRE or text “WIRE” to 83848 to learn more.


Evening Wire: Lebanon Ceasefire Begins & Murder-Suicide Rocks VA | 4.16.26

The Pendragon Cycle

Menu

— News —

Supreme Court Appears Reluctant To Let Trump Fire Fed’s Lisa Cook