Supreme Court appears inclined to prevent Trump from firing Fed governor

Updated at 3:45 p.m. on Jan. 21

The Supreme Court on Wednesday appeared likely to leave Lisa Cook, a member of the Federal Reserve’s Board of Governors, on the job while her challenge to President Donald Trump’s attempt to fire her continues. Although the Trump administration contends that the president acted within the law, a majority of the justices seemed ready to reject the government’s request to allow him to remove her, even if it was not clear whether the justices would send the case back to the lower courts or instead go ahead and rule that Trump does not have a good reason to fire Cook.

Wednesday’s arguments in Trump v. Cook implicated two related issues – the president’s power to fire the heads of multi-member, independent agencies and his ongoing frustration with the actions (or lack thereof) of the Federal Reserve. Since Trump took office last year, the court – on its interim docket – has allowed him to remove members of the National Labor Relations Board, Consumer Product Safety Commission, and the Merit Systems Protection Board. The justices also heard arguments in December in the case of Rebecca Slaughter, a member of the Federal Trade Commission whom Trump fired in March. They are expected to decide by summer whether a federal law that bars him from removing members of the FTC except in cases of “inefficiency, neglect of duty, or malfeasance in office” violates the constitutional separation of powers.

Trump has also been sharply critical of the Fed and its chair, Jerome Powell, since he was sworn in for a second term last year, particularly for its reluctance to lower interest rates. The Fed eventually lowered rates at meetings this fall.

Powell disclosed earlier this month that he is under investigation by Jeanine Pirro, the U.S. attorney for the District of Columbia, for alleged irregularities in the $2.5 billion renovation of the Fed’s headquarters and Powell’s statements to Congress about the renovation. The White House has said that Trump did not direct Pirro to investigate Powell, who attended Wednesday’s argument.

Cook was first appointed to the Fed in 2022; then-President Joe Biden reappointed her to serve a new 14-year term on the board in 2023. Under the Federal Reserve Act, Trump can only fire Cook “for cause” – a term that the law does not define.

In August 2025, Trump posted screenshots on the social media site Truth Social of a letter in which he fired Cook from the Fed. Trump contended that, before joining the Fed, Cook had committed mortgage fraud by designating both a house in Michigan and a condo in Atlanta as her “primary residence” when taking out loans within a two-week period. (Cook “unequivocally” denies the allegations and says that she is “prepared to refute the allegations in an appropriate forum.”)

Cook went to federal court in Washington, D.C., where U.S. District Judge Jia Cobb issued an order that allowed Cook to stay at the Fed while her challenge continued. When a federal appeals court declined to disturb that decision, the Trump administration went to the Supreme Court, asking the justices to intervene and allow it to remove Cook. In an order on Oct. 1, the court put that request on hold but agreed to hear arguments in January.

U.S. Solicitor General D. John Sauer, representing the Trump administration, told the court on Wednesday that deceit or gross negligence by a financial regulator in a financial transaction should be cause for her removal. It “sends the wrong message,” he suggested, for someone like Cook to be setting interest rates for the American people.

Former U.S. Solicitor General Paul Clement, representing Cook, emphasized that the Federal Reserve is a “uniquely structured entity” with a distinct historical tradition. Adopting the administration’s view of the “for cause” removal provision, Clement contended, “would reduce the removal restriction in this unique institution to something that could only be recognized as at-will employment.” There was no reason, Clement continued, for Congress to create the Fed as an independent entity only to give it a removal restriction as “toothless” as the president contends.

During just under two hours of oral arguments, the court wrestled with a variety of difficult questions. One such question stemmed from Cook’s contention that she was entitled to notice and an opportunity to be heard before she could be fired. The Trump administration disputed that Cook has such a right, pointing to the lack of any provision for notice and a hearing in the removal law.

Justice Clarence Thomas was sympathetic. He suggested to Clement that, if Congress was truly concerned about the Fed’s independence, it could have included language in the removal statute to require notice and a hearing. Clement countered that when Congress drafted the removal law, the Senate debate featured legislators using the terms “for cause” and “inefficiency, neglect of duty, and malfeasance in office” (a standard used for other agency officials that the Supreme Court has interpreted to require notice and a hearing) “interchangeably.”

But even if Cook has a right to notice and to be heard, some justices asked, what kind of procedures would be required? Clement cited the system used by former President William Taft, which gave officials notice and an opportunity to be heard before a full tribunal. For Clement, the key point was that if an administration created a more detailed system, there would be “less room .. for judicial review” and for “judicial second-guessing of factual determinations.”

Justice Samuel Alito found Clement’s “sliding scale” “extraordinarily unhelpful,” and asked Clement to describe the “minimum” process that would be required in a case like Cook’s.

Clement responded that an official like Cook would be entitled to notice, an opportunity to provide evidence to the decision-maker, and an opportunity to keep the decision-maker from prejudging the evidence. The president, Clement argued, should not have said in his Truth Social post that Cook should “resign or be fired.” Other justices seemed more amenable to the idea that Cook should receive greater process. Justice Brett Kavanaugh asked Sauer to explain “what’s the fear of more process here?” Providing Cook with notice and an opportunity to present her case, he posited, would help the executive branch make better decisions and improve public confidence in those decisions.

Justice Amy Coney Barrett appeared to agree. She told Sauer that the Trump administration had “spent a lot of time litigating [Cook’s] case.” Why couldn’t it have put those resources into a hearing instead, she wondered aloud, to show that it had cause to fire Cook?

The court also grappled with what it would mean for the president to fire a member of the Fed “for cause,” and whether that standard had been met in Cook’s case. Clement insisted that, as Cobb had held, a member of the Fed cannot be fired for conduct that occurred before she took office. When some justices questioned whether that standard would allow a Fed governor to remain in office despite severe misconduct, Clement pointed out that (among other things) Congress could always impeach the governor.

Other justices disputed Sauer’s contention that the allegations against Cook rose to the level of “deceit” or “gross[] negligence.” Chief Justice John Roberts, for example, observed that the allegations were “contradicted by other documents in the record,” and he noted that any representations about her residences would have been made as part of a “stack of papers you have to fill out.”

Justice Ketanji Brown Jackson suggested that the facts of Cook’s case still needed to be developed – for example, when Cook signed the mortgage applications and what she thought she was attesting to.

Justice Sonia Sotomayor also suggested that there is still a “factual dispute” about the allegations against Cook, citing assertions made in a letter to the Department of Justice by Cook’s lawyer. Is it “grossly negligent,” she asked to make a mistake on a mortgage application, and who should resolve that issue?

Roberts appeared frustrated with the Trump administration’s contention that federal courts do not have the power to reinstate officials who have been wrongly removed. If you are correct, he said to Sauer, then “why are we wasting our time wondering if there’s cause” to fire an official in the first place – because the answer to the latter question ultimately would not make a difference?

Justice Elena Kagan raised a similar concern. “If there’s no way to reinstate” an official who was improperly fired, she said, then “what does this cause requirement amount to?” It seems, she said “non-effectual.”

Several justices expressed dissatisfaction with the posture in which the dispute came to the court – on its interim docket, rather than after full briefing on the merits. This included Alito, who pressed Sauer to explain why the case had “to be handled by everyone” – including the lower courts – on an expedited basis? Even the executive branch, Alito complained, handled Cook’s termination “in a very cursory manner.”

Sotomayor echoed this sentiment, emphasizing the many questions that the lower courts had not addressed. Why, she said to Sauer, are you asking us to decide these issues – such as whether the president’s determination of “for cause” is reviewable at all – once and for all in an emergency application?

Because the case came to the Supreme Court on its interim docket, with the Trump administration asking the justices to pause Cobb’s order, the factors that the justices will consider in deciding whether to grant that request include not only whether the administration is ultimately likely to prevail on the merits of the dispute, but also the public interest and whether either set of litigants will be permanently harmed by a ruling for the other side.

Addressing the “public interest” factor, Barrett asked Sauer about a “friend of the court” brief by a group of economists supporting Cook, who contended that granting the stay requested by the Trump administration “could trigger a recession. How,” Barrett queried, “should we think about the public interest in a case like this?”

Sauer urged the justices to “consider all those amicus briefs and their … predictions of doom with a fairly jaundiced eye,” dismissing the briefs “as a reflection of very elite opinion.”

But when, at Barrett’s prompting, Sauer conceded that there is a risk of a recession, Barrett countered, “I don’t want to be responsible for quantifying that risk. I’m a judge, not an economist.”

In an exchange with Clement later in the argument, Barrett also asked him to explain why, even if the court were to ultimately rule that Trump does have the power to fire Cook, the president is not permanently harmed by allowing her to remain in office for now.

Clement told the justices that the Trump administration had agreed that “the Fed is different at least for purposes of this case and that we can’t remove somebody just for policy disagreements.” Therefore, he said, “having somebody continuing in office just because you have a different conception of ‘for cause’ … doesn’t strike me as irreparable harm.” By contrast, he posited, “there are enormous irreparable harms” from allowing Trump to fire Cook now because of the unique role of the Fed in determining monetary policy and the extent to which “markets watch the Fed a little more closely than they watch really any other agency of government.”

Kavanaugh expressed concern about the perceived independence of the Federal Reserve. He told Sauer that, “on … your position that there’s no judicial review” for the president’s determination that he has cause to fire a Fed governor, “no process required, no remedy available, a very low bar for cause that the president alone determines … that would weaken, if not shatter, the independence of the Federal Reserve.”

Kavanaugh also cited what he described as the “real-world effect” of a ruling for the Trump administration: if the court allows Trump to remove Cook, “what goes around comes around,” and a future Democratic president will remove Republican appointees to the Fed. When Sauer demurred, telling Kavanaugh that he “cannot predict” what might happen in the future, Kavanaugh retorted that “history is a pretty good guide. Once these tools are unleashed, they are used by both sides and usually more the second time around.”

Toward the end of Clement’s time at the lectern, Kavanaugh was looking for what he described as the “simplest way … to decide” the case. Would it be for the court to deny the Trump administration’s request to pause Cobb’s order, on the ground that Cook had not had sufficient process before she was fired?

Clement agreed that it would be, but with a caveat. Such a ruling, he said, would “maximize[] the chances” that the dispute would return to the justices again in the future.

A decision in the case is expected by summer.