Key Highlights
- The supreme court’s decision on the case will test the limit of Trump’s powers as leader of the executive branch. The Trump administration is waging an unprecedented battle with the Fed over interest rates, after policymakers defied the president’s repeated calls for drastic cuts. The Department of Justice (DoJ) has been widely criticized this month for launching a criminal investigation into Jerome Powell, the US central bank’s chairman.
- While it is pursuing Powell over renovations to the Fed’s historic office buildings in Washington DC, he has argued he is being targeted for not “following the preferences of the president”. Powell plans to attend Wednesday’s hearing at the supreme court in person, according to reports. Trump’s bid to remove Cook last summer marked the first time in US history that a president fired a sitting Fed governor.
- She was appointed by Joe Biden in 2022, becoming the first woman of color to serve on the Fed’s board.
- Her term is set to be completed in 2038, as Fed governors serve at 14-year terms. The administration has alleged that Cook committed mortgage fraud by misrepresenting multiple properties as her primary residence to get a better mortgage rate – an accusation which initially came from Bill Pulte, a close Trump ally and head of the Federal Housing Finance Agency, who has instigated similar investigations against others, including New York attorney general Letitia James and Democrat senator Adam Schiff. Cook’s lawyers have accused the administration of “cherry-picking” information, and argued that Cook accurately listed her property on other loan documents.
- The discrepancy the administration is focused on is an “isolated notation”, they have said. Beyond the accused mortgage fraud, Cook’s lawyers are arguing that Fed governors can only be fired “for cause”, and that the Fed governor was denied due process in violation of the US constitution’s fifth amendment. Trump as president has enjoyed wielding seemingly-unlimited power from the executive branch, including allowing the so-called Department of Government Efficiency to fire tens of thousands of federal workers and defund programs across the government. But this case is set to test his limits.
