The Supreme Court heard oral arguments Wednesday in a high-stakes case involving the attempted firing of Federal Reserve Gov. Lisa Cook.
At issue is the legality of President Donald Trump’s attempt to fire Lisa Cook from her post on the Fed’s Board of Governors. The administration alleges Cook took out two mortgages and listed each property as her primary residence.
“For one of [the properties], there’s a dispute about, was that intentional, or was it inadvertent?” said constitutional law expert Thomas Berry of the Cato Institute.
Under federal law, members of the Federal Reserve Board may be removed only “for cause.”
“The president may not simply fire them because he disagrees with their policy views,” Berry said.
Cook argued the removal was unlawful and that she was entitled to a hearing.
A federal district court ruled in Cook’s favor and ordered her reinstated. The D.C. Circuit Court of Appeals upheld that decision. Now, the Supreme Court is considering an emergency application on whether Cook should remain on the board while the case continues.
“Even though this isn’t the final word in the case, it’s still going to likely give us an indication of what the Supreme Court thinks the final outcome should be,” Berry said.
Berry noted the case is limited to the Federal Reserve Board, but carries broader implications.
“This case is really about what’s going to be the standard going forward for firing Federal Reserve Board governors,” he said.
He also warned against limiting judicial review of presidential removal decisions.
“If we accept the view that we just have to trust the presidents when they say that, the courts would have their hands tied,” Berry said.
A ruling is expected later this term. Many media predicted after the hearing that the Court would back the Fed’s independence and — at least temporarily — quash the effort to fire her.
