Court Hears Trump’s Emergency Request to Remove Fed Governor President Trump filed an emergency petition asking the Supreme Court to permit the removal of Governor Lisa Cook while her mortgage‑fraud case proceeds, a step never taken in the Fed’s 112‑year history[5][1]. The hearing, held on Jan 21, featured arguments about whether the president can act “for cause” without a hearing, and the justices expressed skepticism about rushing a decision[3][2]. Administration lawyers argued that Cook’s alleged misrepresentations of two properties meet the statutory “for cause” standard, while Cook’s team contested the adequacy of the evidence[1][2].

Justices Question Presidential Authority and Emphasize Fed Independence Several justices, including Kavanaugh, Barrett, and Roberts, probed the limits of presidential power to dismiss a Fed governor, warning that a broad “for cause” doctrine could erode the central bank’s insulation from politics[3][4]. Kavanaugh repeatedly cautioned that allowing the dismissal could “weaken, if not shatter” Fed independence, echoing concerns voiced across the bench[1][2]. Roberts hinted that a narrow procedural remedy might suffice, suggesting the Court could resolve the case without a full hearing if the record shows insufficient wrongdoing[3]. The justices repeatedly stressed the unique quasi‑private structure of the Fed as a factor in their deliberations[4].

Cook Denies Mortgage‑Fraud Allegations and Cites Incomplete Evidence Governor Cook refuted the administration’s claims, stating the mortgage filings contain truthful disclosures and that the alleged fraud rests on cherry‑picked snippets and a single stray reference to a primary residence[1][2]. Her lawyers invoked the 1803 Marbury decision to argue that removals by the president are subject to judicial review, emphasizing due‑process rights[3]. Cook’s public statement after arguments reaffirmed her commitment to maintaining the Fed’s political independence regardless of the outcome[4].

Broader Political and Market Stakes Highlighted by Powell’s Attendance and DOJ Probe Fed Chair Jerome Powell was expected to attend the arguments, underscoring the case’s significance for monetary‑policy credibility, and he has characterized the DOJ’s criminal investigation as a pretext for policy frustration[2][5]. The Justice Department’s subpoenas and probe into Powell add another layer of tension, linking the dispute to broader concerns about the administration’s pressure on the central bank[4][5]. Economists warned that a politicized Fed could erode credibility and raise Treasury yields, while the potential removal of Cook would give Trump control of four of the seven board seats, reshaping rate‑setting dynamics[5][4].