The Supreme Court appeared skeptical Wednesday of President Trump's attempt to fire a member of the Federal Reserve Board of Governors, an authority that most experts say would imperil the independence of the world's preeminent central bank.
At issue before the justices in the case involving Lisa Cook, a Fed governor, is whether, as the Trump administration argued, that once a president has determined he has cause to fire a Fed board member, that decision in not reviewable by any court. Cook's attorney argued that firing a Fed official for cause without any judicial review would ultimately be disastrous for the Fed's independence.
The administration claims that Cook falsified documents to obtain loans on two different properties she listed as her primary residences. Her lawyers say she listed one of the properties as a vacation home. The accusations against her were lodged initially by Bill Pulte, Trump's head of the Federal Housing Finance Agency. Cook denies wrongdoing. Her lawyers, in court papers, point to recent reporting that four of Trump's Cabinet members, plus his deputy attorney general and even Pulte's own relatives, have recently made applications for multiple mortgages similar to Cook's, without any suggestion of wrongdoing.
Just what the Supreme Court will do is unclear. In other cases last year, the court's conservative majority allowed Trump to remove other agency leaders, at least temporarily overriding federal laws that had protected term-limited agency heads from firing. But at the same time, the court's conservatives, in one cryptic passage of an emergency docket opinion, said that the Fed is different because it is a "uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States." The first Congress created the first bank in 1791, and the second was created in 1816.
Should Trump prevail, however, he almost certainly would seek to replace not just Cook but other Fed governors. Federal Reserve Chair Jerome Powell's term as Fed chair expires this spring, but he has two more years on his term as a Fed governor. Unless Trump is able to remove sitting governors, he will not have a majority of his own appointees on the board during the remainder of his presidency.
This is a developing story and will be updated.
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