“What goes around comes around,” Justice Kavanaugh warned. “And usually more the second time around.”
Supreme Court justices expressed deep skepticism Wednesday about the Trump administration’s claim that presidents can fire Federal Reserve governors without judicial review, due process, or explanation—a position Justice Brett Kavanaugh said would “shatter” the central bank’s independence.
The case involves Fed Governor Lisa Cook, whom President Trump has sought to remove based on allegations of mortgage fraud she allegedly committed in 2021, before joining the Fed. Cook denies the allegations. The Supreme Court Fed independence case is the first of its kind in the Fed’s 112-year history.
“Just ‘You’re Fired’?”
Justice Neil Gorsuch appeared incredulous at the administration’s position. “Just a meeting across a conference table finished with ‘You’re fired’?” he asked. “That’s the process you’re describing?”
Solicitor General D. John Sauer argued Cook committed “deceit or at least gross negligence” in her mortgage documents. Chief Justice John Roberts seemed confused.
“You began talking about deceit,” Roberts said. “Does what you said after that apply in the case of an inadvertent mistake contradicted by other documents in the record?”
“It’s deceit or it’s gross negligence,” Sauer replied. “Either one suffices.”
The Boomerang Problem
Justice Kavanaugh warned that the administration’s approach could backfire spectacularly in future administrations.
“All of the current president’s appointees would likely be removed for cause on January 20th, 2029, if there’s a Democratic president,” he said. “And then we’re really at at-will removal. So, what are we doing here?”
He noted the position would “incentivize” future presidents to dig up “trivial or inconsequential or old allegations” to terminate anyone they disliked. “Once these tools are unleashed, they are used by both sides.”
Living Chairs Unite
All three living former Fed chairs—Alan Greenspan, Ben Bernanke, and Janet Yellen—filed an amicus brief opposing Cook’s removal, joined by former Treasury secretaries and economic advisors from both parties. Bernanke attended the oral arguments.
The brief warned that granting the government’s request “would upset these longstanding protections and the essential functions they serve.”
The case takes on additional significance given that Fed Chair Jerome Powell is now also under criminal investigation by the Justice Department over a building renovation. Trump has repeatedly demanded the Fed lower interest rates.
A decision on Supreme Court Fed independence is expected by early summer.
Developing.
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