President Trump's sacking of Federal Reserve governor Lisa Cook appears to challenge the Supreme Court's inclination to leave the central bank alone.
Days after he demanded her resignation, Trump fired Cook on Monday, citing allegations that she engaged in mortgage fraud.
Congress allows Federal Reserve board members to be removed "for cause," but Trump is the first president to ever use that power, setting up an unprecedented legal controversy that appears destined for the Supreme Court.
While we can only guess how the justices might rule on Trump's power over the Fed, they recently offered a brief hint - by brief, we mean one sentence.
"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," the court wrote.
This single ambiguous sentence does not tell us much, but it appears to suggest that the Supreme Court sees the central bank differently from other government agencies that Trump has shaken up, with the Supreme Court's blessing.
The justices' brief commented appeared in a May emergency ruling that allowed Trump to fire Democratic members of the Merit Systems Protection Board (MSPB) and National Labor Relations Board (NRLB).
The court could now be asked, for the first time, to draw a line on when the president has established "cause" to shake up the Federal Reserve.
Given the Supreme Court's broad view of executive power, it is not unreasonable to predict that they will side with Trump when push comes to shove.
Trump's critics have blasted Cook's firing as an assault on the traditional independence of the central bank, which has for months resisted pressure from Trump to lower interest rates.
The president nominates Federal Reserve members, who serve 14-year terms spanning different administrations. Cook, who was appointed by Joe Biden, says her removal is baseless, and she plans to challenge it in court.
Trump says there are clear indications of misconduct by Cook, who allegedly claimed two different homes as her primary residence two weeks apart.
"The American people must be able to have full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve," Trump wrote in a letter to Cook.
"In light of your deceitful and potentially criminal conduct in a financial matter, they cannot, and I do not have such confidence in your integrity."
