Supreme Court questions Trump’s firing of Lisa Cook

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

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

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

Cook argued that he did not receive due process to dispute the claims, which Fed defenders say is a pretext to allow Trump to assert more control over the bank.

Justice Brett Kavanaugh, a conservative appointed by Trump, was one of the judges to express sympathy with Cook’s arguments, asking: “What is the fear of further process here?”

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

By law, a president can only fire Federal Reserve governors “for cause”.

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

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

The Trump administration asked the court to allow the president to fire Cook, a move that has been blocked by lower courts as the case plays out.

“Whether it was unintentional or a mistake, it was a big mistake,” said solicitor general D John Sauer, who argued the case for the administration.

He said such behavior could undermine confidence in the bank and that the courts should defer to the president’s judgment when it comes to finding cause.

He dismissed questions about the process, saying Trump alerted Cook to the social media issue before he was formally fired.

“There was a post on social media,” he said. “And the answer is opposition.”

Cook denies committing fraud.

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

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

“There was no fraud, no intent to defraud, no criminal or remote basis to allege mortgage fraud,” his attorneys wrote.

Arguing on behalf of Cook, Paul Clement said that people in his position should have the opportunity to present their evidence and be protected from making a decision in advance.

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

Some judges indicated they share the same concerns.

“The position that there is no judicial review, no due process, no available remedy, a very low bar for the reason that only the president determines – that undermines if not destroys the independence of the Federal Reserve,” Kavanaugh said.

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

Federal Reserve chairman Jerome Powell is among the officials expected to attend. He is facing his own criminal investigation related to cost overruns during the renovation of Fed properties – concerns that he called “excuses”.

In other recent cases, the Supreme Court, with a 6-3 conservative majority, allowed the White House to continue firing.

But it signals that it views the Federal Reserve, which is designed to set policy independently from the White House, differently.

Many justices, including conservatives, have indicated they are hesitant to greenlight Cook’s ouster without the courts resolving issues such as whether mortgage filings, made before Cook was appointed, meet the bar for a “for cause” firing.

“We know that agency independence is very important and that independence will be undermined if we decide that these issues are too quick and without due consideration,” said Justice Sonia Sotomayor, a liberal. “So for 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 thing has to be handled at all… in such an urgent 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 was warned of the possible dire economic consequences of a decision that would undermine faith in the independence of the central bank.

“There is danger,” he said. “Isn’t that advice … caution on our part?”