While President Trump was at the World Economic Forum in Davos, Switzerland, reiterating his desire to control Greenland and hashing out a deal with the European nations that oppose that move, the U.S. Supreme Court was considering another of the president’s recent fixations.
Trump has been determined to fire Fed governor Lisa Cook from her post since August. He wrote on Truth Social that he was firing her “for cause” over allegations of mortgage fraud. She denied those allegations—but even more crucially for the country, noted that the president does not have the authority to fire a governor from the Fed, which is independent from the administration. (Presidents can remove Fed officials “for cause,” but Trump’s unproven allegations did not meet that standard, she said.) She filed a lawsuit in the U.S. District Court for the District of Columbia.
The Trump administration appealed, arguing as part of their appeal that the president’s decision shouldn’t be subject to judicial review. Allowing a broad definition of the “for cause” standard would essentially undermine the Fed’s independence, Cook’s attorneys argued. Meanwhile, Trump has continued to go up against Fed chair Jerome Powell, threatening a criminal indictment—which Powell called “a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.” Trump has been musing about who he will pick to replace Powell as Fed chair when his term is up later this year.
This debate made it to the Supreme Court yesterday, which heard oral arguments in Trump v. Cook. Even the court’s most conservative justices, including those appointed by Trump, expressed skepticism about his arguments here. Justice Brett Kavanaugh was concerned about Trump’s efforts to evade judicial review, CNN reported. “Once these tools are unleashed, they’re used by both sides,” Kavanaugh said yesterday. Justice Samuel Alito, who was less certain about lower court rulings that sided with Cook, said Trump had rushed the case through “in a very cursory manner.”
Now, the question seems to be how the justices will handle their decision. It seems unlikely they will give Trump the immediate sign-off he needs to fire Cook. The court could issue a narrow ruling that would allow Cook to stay in her post and bring the case back in a year or two. There could be a ruling on Cook’s due process protections; or one that examines whether Trump had “cause” here.
This case is about Cook, who joined the Fed in 2022 and was the first Black woman to serve on its board of governors; she’s one of two women on the seven-member board right now, alongside Michelle Bowman. But it’s also about much more than that. She will be at the center of the Fed’s future—whether as a governor or not.
Emma Hinchliffe
emma.hinchliffe@fortune.com
The Most Powerful Women Daily newsletter is Fortune’s daily briefing for and about the women leading the business world. Subscribe here.
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PARTING WORDS
"I really think it's important to write about complicated, messy female characters, and Texas is a fun space in which to do it."
— May Cobb, the author of the novel that inspired the Netflix series The Hunting Wives, on her new book about intrigue in small-town, conservative America
