SCOTUS to hear Fed firing case Wednesday

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(The Center Square) - The U.S. Supreme Court will hear arguments on Wednesday to decide whether President Donald Trump can fire Lisa Cook, a member of the Federal Reserve Board of Governors.

In Trump v. Cook, justices of the Supreme Court will review a decision from a lower court judge that reinstated Cook after Trump fired her. 

President Joe Biden appointed Cook to a 14-year term on the Federal Reserve’s board of governors in 2023. Members on the board are appointed by the president and confirmed by the U.S. Senate to serve the terms.

Trump accused Cook of committing mortgage fraud before she joined the Federal Reserve. He said Cook listed homes in both Michigan and Georgia as her “primary residence” for the next year.

“At a minimum, the conduct at issue exhibits the sort of gross negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator,” Trump wrote in a letter to Cook in August 2025.

According to the Federal Reserve Act, members of the board of governors can only be fired by the president “for cause.” Cook sued, asking the court to be reinstated.

Judge Jia Cobb, a U.S. District Court judge for the District of Columbia, issued a temporary order to reinstate Cook as the litigation continued. Cobb argued Cook has similar rights to a lower-level civil servant or teacher and is entitled to notice and a hearing before being fired.

“This theory is untenable and would wreak havoc on sensitive presidential decision-making,” the Trump administration wrote in a petition to the Supreme Court. “The statutory text at issue here imposes only the former, requiring ‘cause’ but saying nothing about notice of a hearing.”

Cobb also argued that Cook’s firing needed to be based on an action she committed while in office at the Federal Reserve.

“The most relevant sources of preexisting law are the federal statutes governing presidential removals of other executive officers – statutes that limited removals to instances of inefficiency, neglect or malfeasance in office,” lawyers for Cook wrote.

It is unclear whether justices on the Supreme Court will weigh in on the merits of Cook’s case, instead, they are more likely to decide whether the lower court’s pause is justified. However, the justices have already heard oral arguments in Trump v. Slaughter, a case challenging Trump’s removal of Rebecca Slaughter, a member of the Federal Trade Commission.

If the court upholds the president’s authority, it could undo an almost 90-year-old precedent that prevented President Franklin Delano Roosevelt from firing members of federal boards like the FTC.

“The court said that where a multi-member commission exercises substantial executive power, the president has the plenary power to remove that official,” said Kannon Shanmugam, a Supreme Court and appellate litigator.

The Supreme Court heard oral arguments in Trump v. Slaughter on Dec. 8 and will issue a decision in the case by July.

Trump v. Cook represents another test of the president’s relationship with the Federal Reserve. Over the last several months, Trump has publicly criticized Federal Reserve Chair Jerome Powell over his decision not to lower interest rates.

"'Too Late' MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!," the president wrote on social media.

The Federal Reserve lowered interest rates three times in 2025. The relationship between the president and Powell intensified recently as the U.S. Department of Justice launched an investigation into the chair.

“The threat of criminal charges 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," Powell said in a video posted Jan. 11 announcing the investigation.

After hearing oral arguments on Wednesday, the Supreme Court will decide whether the order to keep Cook on the board will remain in place by July.