Supreme Court Skeptical of Trump's Move to Remove Fed's Cook, Defends Central Bank Independence

The U.S. Supreme Court expressed skepticism Wednesday (January 21, 2026) over President Trump’s attempt to remove Federal Reserve Governor Lisa Cook amid unproven mortgage fraud allegations, warning the action could undermine the Fed’s independence and destabilize financial markets. Conservative and liberal justices alike questioned the administration’s legal standing during nearly two hours of oral arguments. Justice Brett Kavanaugh, a Trump appointee, cautioned the move could “undermine or even destroy” central bank autonomy. Justices Amy Coney Barrett and Samuel Alito raised concerns over market risks and procedural haste. Cook, the first Black woman on the Fed board, was appointed by President Biden in 2022 and reappointed in 2023 for a 14-year term. Trump sought her removal over allegations she mislabeled primary residences on a 2021 loan—before joining the Fed. Her lawyers called it an inadvertent error; Cook denies wrongdoing. A lower court ruled she may remain in office pending litigation, stating removal grounds must relate to conduct during tenure. The 1913 Federal Reserve Act allows dismissal only "for cause," historically meaning misconduct or dereliction.