The case involving Cook is another test of the president’s firing ability, but also another chapter in Trump’s battle with the Fed.

Tensions with the Federal Reserve have mounted in recent months

Since Trump returned to the White House a year ago, he has expressed displeasure with Powell’s job as Fed chairman. Every few months, reports have swirled that Trump was considering firing Powell, despite restrictions on a president’s ability to fire the Fed chairman without cause.

Much of Trump’s discontent is with Powell’s handling of interest rates, believing the chairman has been too slow to lower them. Amid the speculation about Trump wanting to fire Powell, the two toured renovations of the Federal Reserve building in July. During the tour, Trump sparred with Powell in front of cameras over the cost of the renovations.

Roughly a month after the awkward tour, the president escalated his feud with the Federal Reserve by firing Cook shortly after Federal Housing Finance Agency Director Bill Pulte referred her to the Justice Department for mortgage fraud. Trump cited the mortgage fraud allegation as grounds to fire Cook.

Cook sued Trump, alleging he did not show proper cause to fire her. A federal district court reinstated her, a ruling which was upheld by a federal appeals court, leading the Trump administration to appeal to the Supreme Court’s emergency docket. In October, the high court announced it would defer ruling on the emergency petition until after Wednesday’s hearing – but it allowed Cook to remain in her job in the interim.

While the president has not tried to fire Powell, a significant escalation of the tensions between Trump and the chairman occurred early last week, when Powell announced he had been served grand jury subpoenas by the DOJ. In a video message announcing the revelation, Powell took direct aim at Trump for the criminal investigation, which is said to involve false statements about the Federal Reserve building renovations.

“The threat of criminal charges is 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,” Powell said.

“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation,” he added.

Trump will be in Switzerland on Wednesday, far from oral arguments on Capitol Hill, while Powell is expected to be in attendance as the Supreme Court, skeptical of removals from the Federal Reserve, hears arguments.

Supreme Court has been hesitant with Federal Reserve removals

Trump’s firing of independent agency heads has been a hot issue at the Supreme Court over the past year, with various emergency docket cases and a full merits case coming before the high court. In each of the three emergency docket cases, the Supreme Court has allowed the firings to proceed while litigation plays out.

When the Supreme Court first allowed Trump to fire an independent agency head via an emergency docket order in May, it noted that it considered the Federal Reserve unique and subject to a higher bar for firings. The unsigned majority order in Trump v. Wilcox noted the Fed has “a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” signaling the need for cause to fire one of its members.

During oral arguments in Trump v. Slaughter last month, several justices expressed their “concern” over the implications of the Trump administration’s position that the president has unfettered power to fire independent agency heads.

“Any issues of removal restrictions as a member of the Federal Reserve would raise their own set of unique, distinct issues,” Solicitor General D. John Sauer acknowledged to the justices during separate arguments in December 2025.

The Supreme Court will weigh whether the president has shown sufficient cause to fire Cook, unlike in the Slaughter arguments, where the DOJ argued Trump did not have to show cause for other independent agency head firings.

When firing Cook, Trump cited 2021 allegations that she claimed two different homes as her primary residences to secure more generous loan terms.

“Her conduct creates an intolerable appearance of impropriety in financial matters—yet Cook and her supporting amici have to date refused to offer any explanation for her facially inconsistent representations in any briefing in any court,” the DOJ’s brief in the Cook case said.

Cook’s lawyer argued that the president is trying to remove her by basing his case on “untested allegations,” and implored the Supreme Court to allow her to remain in her position.

“Governor Lisa D. Cook vigorously contests the asserted basis for that removal as a matter of fact and law, and looks forward to debunking allegations that stem from an investigation launched by a presidential subordinate that has not led to any finding of wrongdoing,” Cook’s lawyers said in their brief to the high court.

SUPREME COURT GRAPPLES WITH HOW MUCH EXECUTIVE POWER INDEPENDENT AGENCIES REALLY EXERT

“The President nevertheless insists that the status quo should be altered and Governor Cook should be removed from her office before any facts are found,” the brief added.

Arguments in the emergency docket case will begin at 10 a.m., with a decision expected in the coming weeks.