The US Supreme Court appears divided on President Donald Trump's attempt to oust Federal Reserve Governor Lisa Cook from her position, casting a shadow over the independence of the country's central bank.
In a highly unusual case, the White House sought to fire Cook, citing mortgage fraud allegations against her, despite a lack of formal process. The decision marked the first time in US history that a president fired a sitting Fed governor, and it has significant implications for the Fed's autonomy and its ability to set interest rates.
During oral arguments on Wednesday, conservative justices, including Brett Kavanaugh, expressed concerns about allowing the White House broad discretion to fire Fed officials with seemingly no process. "If this were set as a precedent, it seems to me – just thinking big picture – what goes around comes around," said Kavanaugh, suggesting that such an interpretation could lead to the removal of all current Trump appointees on the Fed in 2029.
The administration's case against Cook centers on alleged discrepancies in her mortgage applications, which officials claim are evidence of fraud. However, Cook's lawyers argue that these discrepancies were "inadvertent mistakes" and point out that there was no formal investigation or hearing over the allegations.
Justice Amy Coney Barrett asked why there was no hearing over the allegations, suggesting that it would have been a simple way to decide the case. Paul Clement, a lawyer for Cook, argued that the court should take a broader view and establish clear protections for the Fed's independence.
The line of questioning during the oral arguments highlighted the extraordinary nature of the case, with several justices expressing concern about the fate of the Fed's independence. The court will have to choose how narrowly it wants to decide the case, but a ruling could set an important precedent for the limits of presidential power over the central bank.
Experts believe that the court may give special protections to the Fed and its officials, setting them apart from other government agencies. Economic research has shown that a truly non-partisan central bank is essential in keeping economies and markets stable.
The Trump administration's campaign to influence the Fed's decision-making process has raised concerns among economists and experts, who see it as an attempt to politicize the central bank. The Fed officials have resisted playing along with Trump's desired agenda, instead sticking to their dual mandate to manage inflation and unemployment.
In a statement after the hearing, Cook emphasized that her removal was about whether the Federal Reserve would set key interest rates guided by evidence and independent judgment or succumb to political pressure.
In a highly unusual case, the White House sought to fire Cook, citing mortgage fraud allegations against her, despite a lack of formal process. The decision marked the first time in US history that a president fired a sitting Fed governor, and it has significant implications for the Fed's autonomy and its ability to set interest rates.
During oral arguments on Wednesday, conservative justices, including Brett Kavanaugh, expressed concerns about allowing the White House broad discretion to fire Fed officials with seemingly no process. "If this were set as a precedent, it seems to me – just thinking big picture – what goes around comes around," said Kavanaugh, suggesting that such an interpretation could lead to the removal of all current Trump appointees on the Fed in 2029.
The administration's case against Cook centers on alleged discrepancies in her mortgage applications, which officials claim are evidence of fraud. However, Cook's lawyers argue that these discrepancies were "inadvertent mistakes" and point out that there was no formal investigation or hearing over the allegations.
Justice Amy Coney Barrett asked why there was no hearing over the allegations, suggesting that it would have been a simple way to decide the case. Paul Clement, a lawyer for Cook, argued that the court should take a broader view and establish clear protections for the Fed's independence.
The line of questioning during the oral arguments highlighted the extraordinary nature of the case, with several justices expressing concern about the fate of the Fed's independence. The court will have to choose how narrowly it wants to decide the case, but a ruling could set an important precedent for the limits of presidential power over the central bank.
Experts believe that the court may give special protections to the Fed and its officials, setting them apart from other government agencies. Economic research has shown that a truly non-partisan central bank is essential in keeping economies and markets stable.
The Trump administration's campaign to influence the Fed's decision-making process has raised concerns among economists and experts, who see it as an attempt to politicize the central bank. The Fed officials have resisted playing along with Trump's desired agenda, instead sticking to their dual mandate to manage inflation and unemployment.
In a statement after the hearing, Cook emphasized that her removal was about whether the Federal Reserve would set key interest rates guided by evidence and independent judgment or succumb to political pressure.
thats like saying you can just fire your friend without asking them first lol. but seriously, this is a big deal and not just cuz it affects the fed, its also about precedent and setting limits on presidents power 
. i mean who knows what would happen if they went after all those trump appointees in 2029? 
its like a game of risk, but with millions of people's livelihoods on the line 
.
. Stats are in - 63% of economists think the Fed's independence is crucial for stable economies 
. I've got a chart here that shows the number of times the White House has tried to influence the Fed's decision-making process since Trump took office... it's at least 27 times 
. And did you know that a truly non-partisan central bank is essential for keeping economies and markets stable? 
I've got a graph showing the correlation between Fed independence and economic growth... it's like, a total positive correlation! 
This is a total power grab, folks! The Fed is supposed to be all about keeping it neutral, not playing politics with interest rates 
.
. On one hand, I think it's awesome that Cook is pushing back against what she sees as an attempt to politicize the Fed. That's what our central bank is for, after all - to keep things stable and not let politics get in the way 
. Don't get me wrong, I think Cook did make some mistakes, but firing her over it seems like a bit of an overreach 
.
. We need that kind of stability in our economy right now 
no way should the Fed be policed by the White House like some kind of puppet show 
, the whole point of having a central bank is so it can set interest rates based on the economy and not politics 
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. I mean, what's next? Firing other Fed officials just because they don't agree with Trump's policies? 
Is it really that hard to distinguish between those two things? It feels like we're playing a game where someone makes a mistake, and then they get fired. But is that justice, or just more of the same old power play? 
the whole point of the Fed is 2 have its own independence so we dont end up with hyperinflation or something. i mean yeah it's sus that they were trying to fire cook but like come on thats a huge precedent. if trump gets away with this who knows what will happen next 