The High Court Sinks Trump's Federal Reserve Ploy

[Celerity]

Today on TAP: The administration’s clumsy effort to oust Fed governor Lisa Cook is stymied again.

https://prospect.org/2026/01/21/high-court-sinks-trumps-federal-reserve-ploy/


Federal Reserve governor Lisa Cook and attorney Abbe Lowell leave the Supreme Court earlier today. Credit: Mark Schiefelbein/AP Photo

The Supreme Court today signaled that it would not allow Trump to fire Federal Reserve governor Lisa Cook, as conservative justices sided with the Court’s three liberals. Allowing Trump to fire Cook based on flimsy evidence in the absence of a hearing, Justice Kavanaugh said, would “weaken, if not shatter, the independence of the Federal Reserve.” “What goes around comes around,” Kavanaugh added, warning U.S. Solicitor General D. John Sauer that if the Court upheld Trump, a future president might fire Trump appointees based on “trivial or inconsequential or old allegations that are very difficult to disprove.”

Justice Amy Coney Barrett, another conservative, pointed to the economic risk of a politicized Fed. She took issue with the administration’s claim that Cook was not even entitled to a hearing to answer Trump’s allegations. “Why are you afraid of a hearing?” Barrett pressed Sauer. The day’s arguments are a further setback to Trump’s efforts to control the central bank. Trump undermined his own case earlier this month when the Justice Department said that it was investigating Fed chair Jerome Powell for possible criminal prosecution.

Powell not only released a video explicitly declaring that he would not be intimidated by Trump but made it a point to be in court for today’s oral arguments. He appeared despite warnings by Treasury Secretary Scott Bessent that he should not come. The potential criminal case against Powell was not at issue today, but his presence was a vivid reminder of what the Cook dispute was really about—Trump’s clumsy efforts to control monetary policy.

The case against Cook began when Trump’s close ally Bill Pulte, who heads the Federal Housing Finance Agency, trolled mortgage records to try to find technical grounds for prosecuting Trump’s enemies. Pulte thought he had struck gold when he discovered that in a preliminary description, Cook had described a condo that she bought in 2021 as a primary residence. But in the actual mortgage application, Cook described the property accurately as a vacation home. Trump nonetheless claimed fraud, and in August announced on social media that he was firing Cook. But Cook refused to leave, and she was backed by Powell.

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[Raven123]

1. Why yes, the supremes do like their money.

The “conservative” justices would have supported Trump, if they didn’t think this would impact their wealth.