Justice Kavanaugh Raises Concerns Over Federal Reserve Independence
Supreme Court Justice Brett Kavanaugh expressed worry during Wednesday’s oral arguments that a case involving Federal Reserve Governor Lisa Cook could undermine the central bank’s independence. The case examines whether President Donald Trump can unilaterally fire a Federal Reserve governor.
Kavanaugh questioned Solicitor General John Sauer, who represented the administration, about Trump’s claim that he alone can decide what constitutes “cause” for removal. “That’s your position—no judicial review, no process, no remedy,” Kavanaugh said. He added that such a low bar could “weaken, if not shatter, the independence of the Federal Reserve.”
Administration Argues High Standard for Removal
Sauer countered that the law actually sets a high standard for removal. “It protects governors from the very thing Congress worried about most—removal for policy disagreement,” Sauer said.
The dispute arises from Cook’s lawsuit challenging Trump’s attempt to remove her from the Federal Reserve’s seven-member board. Cook, appointed by former President Joe Biden, serves a 14-year term. No president has ever fired a board member.
Court Weighs Lower Court Injunction
The justices are considering whether to uphold a lower court injunction that has allowed Cook to remain in her post while her lawsuit proceeds. Trump claims he has authority to fire her, alleging private mortgage fraud, which Cook denies. She also argues she has not received due process.
During arguments, conservative justices seemed sympathetic in a related case on firing members of independent agencies like the Federal Trade Commission, but appeared more protective of the Federal Reserve’s unique independence.
The Fed, created in 1913, controls interest rates and operates independently of Congress. Its decisions do not require presidential or legislative approval. Trump has frequently criticized Chairman Jerome Powell and the Fed for not lowering rates fast enough and has clashed with the central bank over an alleged DOJ investigation.
Implications for Future Administrations
Kavanaugh also questioned the potential precedent, asking what it would mean for future administrations. “If this were set as a precedent, the current president’s appointees could be removed at will by future presidents,” he said, raising concerns about at-will removals undermining agency independence.
Justice Sonia Sotomayor also expressed skepticism, noting the unusual circumstances of Cook’s firing, which Trump initially announced via social media. “This case is irregular, starting with a Truth Social notice. It certainly didn’t invite an opportunity to be heard,” Sotomayor said.
