The US Supreme Court seemed doubtful on Wednesday about President Donald Trump’s decision to remove Federal Reserve governor Lisa Cook.
Trump announced in August that he was removing Cook, accusing her of mortgage fraud. Cook denies the claim and says she was never given a fair chance to respond. Experts say the move may have been an attempt to give the president more control over the Fed.
Limits on Presidential Power
By law, presidents can only remove Federal Reserve governors “for cause.” This rule exists to protect the Fed from political pressure and allow it to make decisions independently. The White House says it met that standard, claiming Cook listed two primary residences on mortgage documents, which could justify her removal.
Solicitor General D. John Sauer, arguing for the administration, said such behavior could undermine confidence in the bank.
Cook Denies Any Wrongdoing
Cook’s lawyers argue there was no fraud. They say the documents were fully accurate and that the claims against her were selective and misleading. They insist there was no criminal intent or basis for the accusations.
Her attorney, Paul Clement, stressed that officials in her position should have the chance to present their evidence and have their case reviewed. He warned that ignoring due process would make the “for cause” rule meaningless and weaken protections designed to keep the Fed independent.
Several justices seemed to agree that rushing a decision could hurt the Fed’s credibility. Justice Sonia Sotomayor said it made sense to let lower courts review the case first. Justice Amy Coney Barrett noted that weakening the Fed could have real economic consequences.
