Supreme Court sceptical of Trump firing of Lisa Cook

Natalie ShermanBusiness reporter

Getty Images Federal Reserve Governor Lisa Cook delivers remarks during an event organized by the Psaros Center for Financial Markets and Policy at the Georgetown University's McDonough School of Business at the university on November 20, 2025 in Washington, DCGetty Images

US President Donald Trump appeared on course for a setback at America’s top court on Wednesday over his unprecedented move to fire a central bank governor.

Supreme Court justices from the left and right asked why they should speed through such an impactful decision, citing concerns about process and implications for central bank independence and the wider economy.

Trump in August said he was removing Federal Reserve governor Lisa Cook, accusing her of engaging in mortgage fraud, which she has denied.

Cook has argued she did not receive due process to dispute those claims, which Fed defenders say were a pretext to allow Trump to assert more control over the bank.

Justice Brett Kavanaugh, a conservative who was appointed by Trump, was among the justices to express sympathy with Cook’s arguments, asking: “What’s the fear of more process here?”

He later warned the administration’s interpretation of the law would “weaken, if not shatter, the independence of the Federal Reserve”.

‘Quite a big mistake’

By law, a president can only remove governors of the Federal Reserve “for cause”.

That requirement was intended to shield the central bank from political pressure and allow it to make policy independently.

The White House contends it has met that bar, accusing Cook of filing mortgage forms claiming two different principal residences at the same time. Banks typically offer lower interest rates for primary homes.

The Trump administration has asked the court to allow the president to remove Cook, a move lower courts had blocked while the case played out.

“Even if it’s inadvertent or a mistake, it’s quite a big mistake,” said solicitor general D John Sauer, who was arguing the case for the administration.

He said such conduct could undermine confidence in the bank and that courts were bound to defer to the president’s judgement when it comes to finding a cause.

He dismissed questions about process, noting that Trump had alerted Cook to the issue on social media before formally firing her.

“There was a social media post,” he said. “And the response was defiance.”

‘Nothing criminal whatsoever’

Cook has denied committing fraud.

In a November letter to the Justice Department, her lawyers said the claims were based on “cherry-picked, incomplete snippets of the full documents”.

They said there was “one stray reference to primary residence” in a mortgage application for an apartment in Alabama, but noted that the file also contained “truthful and more specific disclosures about the property’s use”.

“There is no fraud, no intent to deceive, nothing whatsoever criminal or remotely a basis to allege mortgage fraud,” her lawyers wrote.

Arguing on behalf of Cook, Paul Clement said people in her position should have the chance to present their evidence and be shielded from having a decision made in advance.

He said the administration’s interpretation of the law would make the protection that Congress intended by inserting the “for cause” requirement “toothless”.

Some justices indicated that they shared those concerns.

The “position that there’s no judicial review, no process required, no remedy available, very low bar for cause that the president alone determines – that would weaken if not shatter the independence of the Federal Reserve,” Kavanaugh said.

The lawsuit is seen as high stakes, given swirling debate about Trump’s efforts to influence the Fed, which he wants to lower interest rates more aggressively to boost economic growth.

Federal Reserve chairman Jerome Powell was among the officials expected to attend. He is facing his own criminal probe related to cost overruns during renovations of Fed properties – concerns he has called “pretexts”.

In other recent cases, the Supreme Court, which has a 6-3 conservative majority, has allowed the White House to proceed with firings.

But it has signalled that it views the Federal Reserve, which was designed to set policy independently from the White House, as different.

Several justices, including conservatives, indicated they were hesitant to greenlight Cook’s removal without courts having resolved issues like whether the mortgage filings, which were made before Cook was appointed, would meet the bar for a “for cause” firing.

“We know that the independence of the agency is very important and that that independence is harmed if we decide these issues too quickly and without due consideration,” said Justice Sonia Sotomayor, a liberal. “So to me, waiting to have at least the lower courts look at these issues first makes the most sense.”

“Is there any reason why this whole matter had to be handled by everybody… in such a hurried manner?” asked Justice Samuel Alito, a conservative.

Justice Amy Coney Barrett, another Trump appointee, pressed Sauer to explain what harm the president would suffer by waiting, noting that the court had been warned of potentially dire economic consequences of a decision that could weaken belief in the central bank’s independence.

“There’s a risk,” she said. “Doesn’t that counsel… caution on our part?”

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