Supreme Court Signals Support for Fed Governor Lisa Cook/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ The U.S. Supreme Court appears poised to block President Trump’s attempt to remove Federal Reserve Governor Lisa Cook. Justices expressed concern that firing her could undermine the Fed’s independence. Cook, the first Black woman on the Fed board, denies allegations of mortgage fraud that prompted the move.
Lisa Cook Federal Reserve Dispute: Quick Looks
- The Supreme Court appears skeptical of President Trump’s effort to fire Lisa Cook
- Cook is accused of mortgage fraud, which she denies; no charges have been filed
- Justice Kavanaugh warned of damage to Fed independence if firing proceeds
- Justices may let Cook stay on board while her legal challenge continues
- Trump could replace Cook and gain a majority on the Fed board
- Federal Reserve Chair Jerome Powell attended the hearing in support
- Trump wants lower interest rates to reduce borrowing costs ahead of elections
- DOJ has opened a criminal probe into Powell; Powell says it’s politically motivated
- Case hinges on legal authority over removing Fed governors
- Lower courts have ruled in Cook’s favor so far
Deep Look: Supreme Court Likely to Block Trump’s Attempt to Fire Fed Governor Lisa Cook
WASHINGTON, D.C. — January 21, 2026
The Supreme Court appeared firmly against President Donald Trump’s controversial effort to remove Federal Reserve Governor Lisa Cook, a move that could significantly shift control of the nation’s central bank and potentially reshape U.S. economic policy.
During oral arguments on Wednesday, multiple justices raised alarms about the implications of such an action. Justice Brett Kavanaugh, a Trump appointee, underscored the high stakes, warning that ousting Cook could “weaken, if not shatter, the independence of the Federal Reserve.”
Justice John Roberts and at least four other justices echoed that concern, signaling that the court is likely to deny Trump’s emergency request to remove Cook while her legal battle continues in lower courts.
Political Pressure Meets Legal Boundaries
Cook, the first Black woman appointed to the Fed board, has become a focal point in a legal showdown over the balance of power between the executive branch and the Federal Reserve’s politically insulated structure.
Trump has accused Cook of mortgage fraud, pointing to discrepancies in her 2021 loan documents where she reportedly claimed two properties as primary residences. Cook has denied any wrongdoing, saying the claims are baseless and politically motivated.
“There is no fraud, no deception — this is a distraction,” Cook’s attorney Abbe Lowell stated in a November letter to Attorney General Pam Bondi. “Her disclosures have been accurate and consistent with the facts.”
According to court filings, Cook labeled her Atlanta property as a “vacation home” in a May 2021 loan estimate and referred to it as a “second home” in federal security clearance forms. A single reference calling it a primary residence was described as an inadvertent clerical error.
Trump’s Motives and Market Reaction
Critics argue Trump’s true aim is to consolidate influence over interest rate decisions ahead of the 2026 elections. If Cook were removed, Trump would be able to nominate a replacement, tilting the seven-member board in his favor.
Trump has repeatedly pushed the Fed to cut rates more aggressively, saying cheaper borrowing is key to economic growth. Speaking at the World Economic Forum in Davos earlier Wednesday, he said the U.S. should “pay the lowest interest rate of any country.”
But analysts and Fed officials worry that rapid rate cuts could stoke inflation and destabilize financial markets. The Fed reduced its benchmark rate three times in late 2025, slower than Trump wanted. The central bank recently indicated a pause to monitor inflationary trends.
Financial markets have watched the case closely, fearing it could erode the Fed’s credibility and independence. Wall Street has generally reacted with unease, with bond yields rising amid uncertainty over future Fed leadership.
Criminal Investigation Escalates Fed Fight
In an unprecedented escalation, the Department of Justice has launched a criminal investigation into Federal Reserve Chair Jerome Powell, subpoenaing central bank documents and citing a separate dispute involving renovation costs at Fed buildings.
Powell, in a rare public rebuke, dismissed the investigation as a politically motivated smear. “The pretexts don’t mask the real goal: control over the Fed,” he said.
The DOJ claims the probe is linked to Powell’s congressional testimony on those renovation costs, but many legal observers believe it’s tied to broader White House dissatisfaction with Fed policy.
Court Weighs Fed’s Independence
While the legal question before the Supreme Court centers on whether Cook can stay in her role while litigation proceeds, the broader issue is whether the president has authority to unilaterally fire a Fed governor — something no president has done in the Federal Reserve’s 112-year history.
Trump’s legal team, led by Solicitor General D. John Sauer, argues that Cook’s alleged mortgage misstatements amount to “gross negligence” and justify removal. They claim courts should not interfere in what they say is a lawful executive decision.
But several justices appeared unconvinced. Justice Elena Kagan remarked that allowing such a firing could turn the Fed into a “partisan tool.” Justice Roberts questioned whether returning the matter to lower courts would serve any purpose, hinting at a preference for the high court to set a lasting precedent.
Unlike prior cases involving presidential firings of agency heads, the Fed has a unique hybrid structure. It’s considered “quasi-private,” designed to shield monetary policy from political swings.
A Historic First — Or a Firm Rejection?
No former president has successfully removed a sitting Fed governor. While Trump has prevailed in past legal battles over firing government officials, the court has shown more caution when the Federal Reserve is involved.
Lisa Cook has continued serving on the board while the legal case moves forward. She and Fed Chair Powell were both present at the court on Wednesday, underscoring the moment’s historic significance.
“I will continue to defend the Federal Reserve’s independence,” Cook said in a statement. “That is essential for our economy and our democracy.”
A ruling is expected in the coming weeks. If the court rejects Trump’s request, Cook will remain in her position as legal proceedings play out — and the Fed’s fragile independence may be preserved, for now.
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