Could President Trump finally rein in the Federal Reserve’s unchecked power? That’s the question gripping Washington as the Supreme Court prepares for a pivotal showdown next week.
The Supreme Court will hear arguments on Wednesday regarding whether President Trump has the authority to dismiss Federal Reserve Governor Lisa Cook over allegations of mortgage fraud.
This case emerges amid heightened scrutiny of the Federal Reserve, compounded by a Justice Department criminal investigation into Fed Chair Jerome Powell that surfaced last weekend.
The issue has sparked fierce debate over the balance of power between the presidency and independent entities like the Federal Reserve, the Hill reported. Supporters of Trump’s position argue that the executive branch must have oversight to ensure accountability. Critics, however, warn of overreach that could undermine institutional independence.
Sen. Elizabeth Warren told reporters, “Once Trump controls a majority of the Fed, he can use the Fed’s vast powers to enrich himself personally – to reward his billionaire friends and to punish his enemies.” That’s a dramatic claim, but it sidesteps the core issue: shouldn’t a president have the tools to address potential misconduct? If allegations like mortgage fraud against Lisa Cook hold water, waiting for bureaucratic gridlock isn’t an option.
Trump’s argument isn’t a blanket rejection of the Federal Reserve Act of 1913, which limits firings to “for cause.” He’s claiming valid grounds for Cook’s dismissal, even if the statute leaves “cause” frustratingly vague. This isn’t about whims; it’s about enforcing standards.
The Supreme Court itself has hinted at the Fed’s distinct role, noting in an unsigned May opinion, “The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States.” That’s a nod to history, but does it mean the Fed should be untouchable? Hardly—tradition shouldn’t trump accountability.
The justices’ conservative majority has shown openness to curbing firing protections at other agencies like the Federal Trade Commission and the National Labor Relations Board. Yet, they’ve suggested the Fed might deserve special consideration. Trump seems to have picked up on these cues, tailoring his approach to fit within legal boundaries.
This isn’t just about Lisa Cook—it’s part of a broader push for what’s called the unitary executive theory, where presidential authority over the executive branch takes precedence. If the Fed can operate without oversight, what stops other agencies from becoming rogue fiefdoms? That’s the real risk here.
Meanwhile, Fed Chair Jerome Powell remains in place despite months of Trump publicly mulling his removal over sluggish interest rate cuts. Add to that the Justice Department’s probe into Powell, now public knowledge since last weekend, and the Fed’s leadership looks shakier than ever. The timing couldn’t be worse for an institution already under the microscope.
Trump’s critics paint this as a power grab, but let’s be clear: independent doesn’t mean unaccountable. If Powell or Cook is tied to credible wrongdoing, shouldn’t there be consequences? The progressive narrative of “hands off the Fed” feels more like protecting a sacred cow than defending principle.
The Federal Reserve Act of 1913 was meant to balance independence with oversight, not create an untouchable elite. Leaving “cause” undefined might have made sense a century ago, but today it’s a loophole begging for clarity. Trump’s move to act on specific allegations could force a long-overdue reckoning.
What’s at stake next week isn’t just one governor’s job—it’s whether the president can steer agencies that impact every American’s wallet. The Fed’s quasi-private status, as the court noted, is unique, but uniqueness shouldn’t mean immunity. That’s a dangerous precedent.
Some worry this could politicize the Fed, turning it into a presidential pawn. Fair point, but isn’t the flip side just as bad—unelected officials wielding immense power with no one to answer to? A middle ground must exist where cause-based firings are transparent and justified.
As the Supreme Court weighs this case, the nation watches. Will Trump’s vision of executive authority reshape the Fed, or will historical protections hold firm? Either way, the outcome could redefine how power flows through Washington’s most insulated corners.
