Topline
The Supreme Court will hear oral arguments Wednesday over whether President Donald Trump can legally fire Federal Reserve Governor Lisa Cook, a landmark debate over the Fed’s independence that comes as the Trump administration has launched new attacks against its chair Jerome Powell.
Federal Reserve Governor Lisa Cook delivers remarks at the Georgetown University’s McDonough School of Business on November 20, 2025 in Washington, DC.
Getty Images
Key Facts
The court will hear oral arguments in Trump v. Lisa Cook, a dispute over whether Trump can fire Cook from the Fed’s board because of alleged issues with her personal mortgages, which she denies.
Trump said in August he was firing Cook because of the perceived mortgage issues, but she has remained on the board as courts have sided with her and struck down her termination.
The Federal Reserve Act only allows presidents to fire members of the Fed’s board “for cause,” which typically refers to some kind of gross misconduct on the job—something that wasn’t the case here, Cook’s attorneys argue.
The case is distinct from another dispute the high court is considering over whether Trump can fire other members of independent boards, as justices have suggested they believe the Federal Reserve has a higher degree of independence than other federal agencies do, and any firings there should be held to a higher standard.
What To Watch For
The Supreme Court will likely rule in a few months, sometime before the court’s term ends in late June. Cook will remain in her job at the Fed while the court is deliberating.
Lisa Cook’s Alleged Mortgage Issues Explained
Trump has alleged Cook should be fired because, before joining the Fed, she allegedly made misstatements on mortgage documents, listing her properties in Michigan and Atlanta as both being her “primary” residence. Doing so may have allowed Cook to obtain lower interest rates, which Trump has argued constitutes fraud that makes her unfit to serve on the Fed’s board. Cook has denied any impropriety and described Trump’s allegations as “unsubstantiated” in court filings. Mortgage documents released as part of court proceedings show Cook properly described her Atlanta property as a vacation home in other mortgage application documents, which her attorney Abbe Lowell argued in a letter to the DOJ makes it “impossible to conclude” she intended to commit fraud. Any suggestion in other documents that the property was a primary residence was “at most an inadvertent notation,” Lowell argued. Even if there were issues with her mortgage, Cook’s lawyers argue that still would not justify her firing, because she was not given proper due process to challenge her termination, and her personal mortgage application does not constitute professional misconduct. Cook is one of several Democrats whom the Trump administration has targeted by taking aim at their mortgage filings, along with New York Attorney General Letitia James, Sen. Adam Schiff, D-Calif., and Rep. Eric Swalwell, D-Calif. James is the only one who has so far faced criminal charges, but they were later dismissed, and the government has failed multiple times to reindict her.
What Happens If Trump Fires Lisa Cook?
If Trump is allowed to terminate Cook, it would pave the way for Trump to appoint a majority of the members of the Fed’s board of governors. That could allow the president to exert more control over the board, raising concerns from critics and economists that Trump will infringe on the Fed’s historical independence from political interference. Any interference could raise inflation and roil markets, analysts have speculated, with Bank of America CEO Brian Moynihan telling CBS News in December, “The market … will punish people if we don’t have an independent Fed.”
Surprising Fact
While the Trump administration has targeted Cook for allegedly listing multiple properties as personal residences, ProPublica reports multiple Trump Cabinet members—and the president himself—have used similar tactics in their mortgage filings. All have denied any wrongdoing.
Does Trump’s Investigation Into Jerome Powell Impact Cook’s Case?
The Supreme Court case over Trump firing Cook is completely separate from the Trump administration’s criminal investigation into Powell. The Fed chair has said the Justice Department is investigating him over perceived issues with the Fed’s renovations of its headquarters, though Powell contends the investigation is actually retaliation for him refusing to lower interest rates as Trump wants. Lev Menand, an associate law professor at Columbia University and former economist at the Federal Reserve, told reporters on a press call last week that the controversy over Powell could still “undermine some of the president’s arguments” in the Cook case and “be a problem” for the government at the Supreme Court. The Trump administration is arguing in court that Cook’s firing was “for cause” and solely due to her alleged mortgage issues, rather than any political retaliation, Menand said, but Trump “trying to potentially move a criminal case against the [Fed] chair” at the same time “tends to suggest that the goal here is to take over the Fed and not to figure out whether Lisa Cook committed a removable offense or not.”
Further Reading
Source: https://www.forbes.com/sites/alisondurkee/2026/01/21/supreme-court-will-consider-whether-trump-can-fire-lisa-cook-today/
