The justices heard arguments that Trump fired Cook over allegations he committed mortgage fraud, which Cook denies. In the Fed’s 112-year history, no president has ever fired a sitting governor. independent from day-to-day politics. The case presents the court with one of Trump’s more extraordinary efforts to expand presidential power. Although courts often side with him on emergency petitions, Cook’s case may be an exception.
Judge Brett Kavanaugh, one of three Trump appointees to the U.S. Supreme Court, said allowing Cook to be fired “would undermine, if not undermine, the independence of the Fed.”
At least five of the nine justices also expressed skepticism about the effort to remove her.
Cook and Fed Chairman Jerome Powell Arguments lasted nearly two hours in a packed courtroom.
“As long as I serve at the Fed, I will uphold the principles of political independence and serve the American people,” Cook said in a statement after the debate.
interest rate
Trump’s critics say the real motivation for trying to fire Cook is the Republican president’s desire to exert control over U.S. interest rate policy. If Trump succeeds in ousting Cook, the first black female Fed governor, he could replace her with his own appointee and gain a majority on the Fed’s board. The case is being closely watched by Wall Street investors and could have broad implications for financial markets and the U.S. economy.
Trump has been dismissive of concerns that cutting interest rates too quickly could spark higher inflation. He wants deep spending cuts so the government can borrow more cheaply and Americans can pay lower borrowing costs for new homes, cars or other big purchases, as concerns about high costs have soured some voters on his economic stewardship.
Earlier on Wednesday, Trump reiterated his call for the Federal Reserve to cut interest rates significantly during a speech in Davos, Switzerland, saying the United States should pay “the lowest interest rates of any country in the world.”
Board of Directors Cut key interest rates Three in a row in the last four months of 2025, but that’s slower than Trump would like. The Fed also said it may keep interest rates unchanged in the coming months due to concerns about inflation.
The question before the court is whether Cook can remain in office her challenge to dismissal Held in court. A lower court judge allowed her to continue as one of seven central bank governors. The justices could simply deny the emergency appeal sought by Trump and allow the case to continue in lower courts.
Chief Justice John Roberts also appeared skeptical of Trump’s actions, saying it might be pointless to send the case back to a lower court rather than issue a more lasting ruling.
A decision is expected in early summer.
Taking on the Fed
As the Cook case goes to high court, Trump’s confrontation with the Fed escalates sharply. The Ministry of Justice is open Criminal investigation into Powell and issued a subpoena to the central bank.
Powell himself responded to Trump in a rare move, calling the threat of criminal charges an “excuse” that obscured the real cause, which was Trump’s dissatisfaction with interest rates. The Justice Department said the dispute was Testimony ostensibly about Powell The cost of a massive renovation of the Federal Reserve Building was raised with Congress in June.
In the first year of Trump’s second term, the justices have generally, but not always, agreed with Trump’s calls for emergency action to offset lower court rulings against him, including allowing the president to fire other government agency heads at his own discretion without claiming they did anything wrong.
But the court has signaled that it is approaching the independence of the nation’s central bank more cautiously, calling the Fed “a uniquely structured quasi-private entity.”
Deputy Attorney General John Saul said that in Cook’s case, Trump did not claim that he could fire Fed governors at will. Cook is one of several people charged with mortgage fraud by federal housing officials, along with New York Democratic Attorney General Letitia James and California Democratic Sen. Adam Schiff. Bill Pulte. They deny the allegations against them.
Cook’s attributes
The case against Cook stems from allegations that she claimed two properties in Michigan and Georgia as her “principal residence” in June and July 2021, before joining the Fed’s board of directors. Such a claim can result in lower mortgage rates and a smaller down payment than if one were declared a rental property or a second home.
Sauer said the filings were evidence of “gross negligence” at best and were grounds for Trump to fire her. He argued that, in any case, the court should not review his decision and Cook did not have the right to a hearing.
Judge Amy Coney Barrett said giving Cook a chance to sit down with Trump and respond to her accusations “didn’t seem like a big deal.”
Cook has denied any wrongdoing and has not been charged with a crime. “There was no fraud, no intent to deceive, no criminal conduct, and no basis for alleging mortgage fraud,” Cook’s attorney, Abbe Lowell, wrote in a November letter to Attorney General Pam Bondi.
According to a loan estimate Cook obtained in May 2021, Cook specified that her Atlanta condo would be a “vacation home.” On a form seeking security clearance, she described it as a “second home.” Lowell wrote that the case against her hinged largely on “a stray reference” in a 2021 mortgage document that was “clearly harmless in light of several other true and more specific disclosures.”
Roberts and Justice Sonia Sotomayor, both multi-home owners, expressed some sympathy for Cook.
“I think we can talk about how important it is in the pile of paperwork that you have to fill out when you buy real estate,” Roberts said, responding to Sauer’s assertion that Cook made “pretty big mistakes” on his mortgage application.
Sotomayor said she felt familiar with Cook’s need to move to Washington and rent out her house in Michigan after being appointed to the Fed.
“When I got the job in Washington, I had to leave New York and, frankly, I had decorated my apartment the year before, thinking I would spend the rest of my life in New York,” Sotomayor recalled, alluding to her Supreme Court appointment. “Things have changed.”
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Associated Press writers Fatima Hussein, Christopher Rugaber and Lindsay Whitehurst contributed to this report.