Supreme Court to hear Fed Governor Cook firing case

Supreme Court agreed Dec. 2, 2025 to hear arguments Jan. 21, 2026 on whether President Trump can remove Federal Reserve Governor Lisa Cook without cause. The case challenges the 90-year-old Humphrey's Executor precedent limiting presidential removal power over independent agency heads.

The case stems from Trump's Jan. 20, 2025 executive order directing the Federal Reserve to lower interest rates and reduce quantitative tightening. When Fed Chair Powell and Governor Cook refused to comply, Trump attempted to remove Cook, citing his authority to ensure Fed policies aligned with administration economic goals.

Humphrey's Executor v. United States (1935) established that Congress can limit presidential removal power over independent agency commissioners to protect agency independence. The precedent prevents presidents from removing officials except for cause, maintaining separation between monetary policy and political influence.

Legal scholars argue the case could fundamentally alter the balance of power between the executive and independent agencies. A ruling for Trump would allow presidents to remove Fed governors at will, potentially politicizing monetary policy and inflation control.

Federal Reserve independence is considered crucial for economic stability, preventing political manipulation of interest rates and inflation targets. Countries with politicized central banks historically experience higher inflation and economic instability.

The Supreme Court's 6-3 conservative majority could overturn Humphrey's precedent, giving presidents unchecked control over Fed appointments and removals. This would mark the most significant change to administrative law since the New Deal era.

Lower courts have split on the issue, with some upholding Humphrey's precedent while others question its continued validity. The Supreme Court case will establish whether independent agencies can maintain autonomy from presidential control.

Economists warn that politicizing the Fed could lead to higher inflation, reduced investor confidence, and economic volatility as monetary policy becomes subject to political pressures rather than economic data.