The U.S. Supreme Court appears poised to support Federal Reserve governor Lisa Cook amid President Donald Trump’s efforts to remove her over allegations of mortgage fraud. During a session on Wednesday, justices expressed concerns that allowing Cook’s dismissal could undermine the independence of the Federal Reserve.
Justice Brett Kavanaugh, one of Trump’s three appointees to the court, asserted that such an action “would weaken, if not shatter, the independence of the Federal Reserve.” Chief Justice John Roberts also raised skepticism about Trump’s motives, suggesting it might be more effective for the court to issue a definitive ruling rather than sending the case back to lower courts.
The controversy surrounding Cook stems from allegations that she misrepresented two properties in Michigan and Georgia as her “primary residences” in June and July 2021, prior to her appointment to the Federal Reserve Board. Such claims could potentially lead to lower mortgage rates and reduced down payments than if the properties were classified as rental or second homes.
In October, the Supreme Court allowed Cook to retain her position despite the Trump administration’s attempt to oust her. This decision came during a turbulent period marked by ongoing debates over interest rates. Cook, who was appointed by President Joe Biden, has firmly stated her intention to remain in her role, asserting that she will not be “bullied” by Trump. Her attorney, Abbe Lowell, emphasized that she would continue to fulfill her responsibilities as a Senate-confirmed Board Governor.
The backdrop to this legal dispute includes an ongoing investigation by the Department of Justice into the Federal Reserve’s renovation of its headquarters in Washington, D.C. Prosecutors are examining whether Jerome Powell, the Federal Reserve Chair, provided false testimony to Congress last June regarding the renovation costs, which have reportedly escalated from approximately $1.9 billion to at least $2.5 billion. The Federal Reserve attributes this increase to rising material and labor costs, as well as unforeseen complications such as the discovery of asbestos. Critics, including Trump, have denounced the project as a misuse of funds.
Senate Majority Leader John Thune has called for a serious investigation into the DOJ’s actions, advocating for the agency to remain free from political influence. U.S. Attorney Jeanine Pirro, leading the investigation, stated via social media that her office’s decisions are based solely on the merits of the case.
Critics of Trump argue that his push to remove Cook is rooted in a desire to exert greater control over U.S. interest rate policy. If Trump successfully ousts Cook, who is the first Black woman to serve as a Federal Reserve governor, he could appoint a replacement, thereby securing a majority of his appointees on the board. The Federal Reserve has made three interest rate cuts over the last four months of 2025, a pace that does not align with Trump’s expectations. The Fed has also indicated a potential pause on rate changes in the upcoming months due to inflation concerns.
As the situation unfolds, the implications for the Federal Reserve’s independence and broader economic policy remain significant.
