Supreme Court hears arguments this Wednesday about Trump’s attempt to fire Lisa Cook from the Fed

Montage shows Lisa Cook and Donald Trump SAUL LOEB and ANDREW CABALLERO-REYNOLDS / AFP The Supreme Court of the United States is holding a session this Wednesday (21) to hear arguments for and against President Donald Trump’s attempt to dismiss Lisa Cook as director of the Federal Reserve, the US central bank. 🔎 In practice, the Supreme Court analyzes whether Trump has the power to remove Lisa Cook from office. Although the Republican announced, in August 2025, the dismissal of the director, the Court blocked the measure. The White House appealed to the Supreme Court, which is now considering the case. Experts warn that the Fed’s independence is at stake. Since the beginning of his second term, Trump has been looking for ways to pressure the central bank to cut interest rates to stimulate economic activity. The Fed, however, has adopted caution in its decisions. According to The New York Times, the institution’s president, Jerome Powell, is expected to attend the hearing in defense of the autonomy of the American Central Bank. In addition to trying to fire Cook, Trump had been insulting and pressuring Powell. Recently, he expanded the offensive against the Fed and opened an investigation against the economist because of renovations to the institution’s buildings. The central banker denies irregularities and condemned the White House’s attitude, stating that the episode reinforces a sequence of unprecedented political pressure on the Fed to force interest rates in the US to fall. 📱Download the g1 app to see news in real time and for free 🗒️Do you have any reporting suggestions? Send it to g1 See the videos that are trending on g1: See the videos that are trending on g1 Trump’s justifications Lisa Cook, who will also be present at the oral arguments this Wednesday, is accused by the Trump administration of mortgage fraud — which, according to the White House, would constitute “just cause” for her dismissal. (read more below) The Trump administration claims that the Fed director committed fraud by declaring two residences as primary, supposedly to obtain better real estate financing conditions. The case was referred to the Department of Justice. The Fed director denies the allegations, based on loan documents signed before she joined the Federal Reserve. In October, the Supreme Court provisionally ruled that she could remain in office while the legal process continues. The reading of experts and the financial market is that, if the highest court in the United States authorizes Cook’s dismissal, Trump and future presidents will have room to remove Fed directors and interfere with the institution’s independence. (learn more below) After the Republican’s measure, unprecedented in US history, a group of 18 former Federal Reserve directors, former Treasury secretaries and other senior officials who served in different governments asked the Supreme Court to reject the American president’s petition. Law seeks to protect the Fed from political interference When creating the Fed in 1913, the US Congress approved the Federal Reserve Act, which included measures to protect the central bank from political interference. The law states that directors can only be removed by the president “for cause,” although it does not define the term or indicate the procedure for removal. To date, this device has never been tested in court. On September 9, a district judge in Washington ruled that Trump’s allegations that Cook had committed mortgage fraud did not constitute sufficient grounds for his removal. The Fed director sued Trump in August, after the president announced his dismissal. She argued that the allegations did not give her legal authority to remove her and served only as a pretext due to her position on US interest rate decisions. What to expect from the decision Even if the result favors Lisa Cook, the decision could serve as a roadmap on how a president can remove a member of the central bank’s board, according to legal analysts consulted by Reuters. This is because, although Cook’s retention in the position is considered the most likely outcome, a contrary decision could highlight the flaws in the dismissal attempt. In this way, the process would indicate the necessary path to characterize the “just cause” required to remove a director from the monetary authority, fueling possible future strategies. “The door is open,” former Cleveland Fed President Loretta Mester, now an adjunct professor at the University of Pennsylvania’s Wharton School of Business, told Reuters. “The question is how will this be resolved in a way that doesn’t allow whoever is in the president’s office to simply decide they don’t want a person, accuse them of something and that will be enough,” he added. Chairs at the Fed In the second half of 2025, Trump began to dedicate himself to nominating names aligned with his economic agenda for the Federal Reserve board. The Republican has already appointed Stephen Miran to replace Adriana Kugler, director who anticipated her departure from the position in August. If the court confirms Lisa Cook’s dismissal, Trump will have guaranteed at least two appointments to the Fed board. The position of president of the institution is also on the horizon, as Powell’s term ends in May. Amid the moves at the Fed, if Trump reaches a majority of allies on the institution’s board — which has seven members — he will have greater influence over the approval of appointments at the 12 regional banks. Thus, it would increase its interference in interest rate decisions. Who is Lisa Cook Who is Lisa Cook, Fed director who decided to face Trump Lisa Cook made history in 2022 by becoming the first black woman appointed to the Fed board, with a term until 2038. She was a professor of economics and international relations at Michigan State University, an economist at the University of Oxford and a doctorate from the University of California, Berkeley. As a researcher, she investigated the impacts of discrimination on the American economy and how recessions affect the poor most. She speaks five languages, including Russian, and is an expert in international development, having participated in Rwanda’s recovery after the 1994 genocide. Cook was nominated for the position by Democratic President Joe Biden. Throughout his career, he was a member of Barack Obama’s Council of Economic Advisors and served in the US Treasury Department. As one of seven members of the Fed board, Cook participates directly in decisions about interest rates in the US — the main instrument for containing inflation and stimulating the economy. In recent months, she defended the maintenance of rates, adopting a cautious stance in the face of inflationary pressures and the search for economic stability. * With information from Reuters news agency

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