January 22, 2026

SCOTUS Skeptical in Fed Firing Case

Donald Trump is once again testing the limitations of his executive power as the president, and the justices seemed reticent to let it go unchecked.

On Wednesday, the U.S. Supreme Court heard oral arguments on the issue of presidential powers, a.k.a Donald Trump’s firing of Lisa Cook, a Joe Biden-appointed Federal Reserve governor.

The Federal Reserve is special — and not necessarily all in a positive sense. It’s run by a body of governors serving 14-year terms, and unlike other government agencies, those governors are meant to be protected from outside political influence because their main job is to make monetary decisions. Fair enough. However, the Fed regulates the value of the U.S. dollar and controls interest rates — decisions that affect the entire U.S. economy. Ergo, when most of the board have Keynesian goals that sometimes infringe on capitalistic and individual freedoms, the wisdom of a centralized bank becomes even more questionable.

Nevertheless, in 1935, Congress passed legislation to protect the governors from outside political pressure, though they gave the president the power to fire governors “with cause.”

On Wednesday, during oral arguments, Solicitor General D. John Sauer explained that Lisa Cook had allegedly committed mortgage fraud. Cook claimed that both her Michigan and Washington, DC, homes were her primary residences, likely to secure a better mortgage rate. This whiff of suspicious activity from a Federal Reserve governor was enough for President Trump to assume that Cook was unfit for the duties allotted to her.

Justice Brett Kavanaugh believed that Cook’s firing would weaken the Federal Reserve’s apolitical nature, if not destroy it entirely, because it has not yet been determined whether Cook indeed committed mortgage fraud. She has been accused but not tried, and she denies the allegations.

Kavanaugh told Sauer, “Your position that there’s no judicial review, no process required, no remedy available, a very low bar for cause that the president alone determines … would weaken, if not shatter, the independence of the Federal Reserve.”

Sauer, for his part, insisted that the courts don’t have the authority to review Trump’s decision because of the president’s constitutionally enumerated powers.

Overall, the justices signaled that they will probably not let this firing stand. After all, it does make a difference that Cook has merely been accused of mortgage fraud, not convicted.

It also doesn’t help that the president has publicly attacked Federal Reserve Chair Jerome Powell, weakening his overall case. Powell is under investigation for allegedly lying to Congress about the cost of renovations to the Federal Reserve building, but that case is even weaker and bolsters the narrative — both rightly and wrongly — that Trump is merely going after his enemies.

The entire Supreme Court hearing on Wednesday lasted two hours, and the decision is likely to come in the summer. Based on the line of questioning, though, it won’t be in Donald Trump’s favor.

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