Powell Steps Into Supreme Court Fight as Trump Presses to Reshape the Fed

US Federal Reserve Chair Jerome Powell is set to attend the Supreme Court’s oral arguments this week in a case that could redefine the independence of America’s central bank, an unusually public show of support for embattled Fed governor Lisa Cook.

The Supreme Court is weighing whether President Donald Trump has the authority to fire Cook, one of the seven members of the Federal Reserve’s governing board. Trump said in late August that he intended to remove her, a move without precedent in the Fed’s modern history. Powell plans to be present at Wednesday’s hearing, according to a person familiar with the matter, speaking on condition of anonymity.

For Powell, the appearance marks a sharp escalation. Until now, his backing of Cook has been largely procedural and restrained. This time, the Fed chair is choosing visibility, stepping into a legal and political clash that strikes at the heart of central bank independence.

The shift follows Powell’s revelation last week that the Trump administration has issued subpoenas to the Federal Reserve, raising the prospect of an unprecedented criminal indictment of a sitting Fed chair. Powell, who was appointed by Trump in 2018, appears to be abandoning the low-profile approach he took last year in response to repeated attacks from the White House, opting instead for open confrontation.

In a video statement released on January 11, Powell condemned the subpoenas as “pretexts”, accusing the administration of using them to pressure him into aggressively cutting interest rates. The Fed lowered rates three times late last year, bringing its benchmark rate to about 3.6 percent. Trump has argued it should be closer to 1 percent, a view that has found little support among mainstream economists.

At the centre of the Supreme Court case is the administration’s accusation that Cook committed mortgage fraud, an allegation she has denied. No criminal charges have been filed. Cook sued to block her removal, and on October 1 the Supreme Court issued a temporary order allowing her to remain on the board while the case is under review.

The stakes extend well beyond Cook’s position. If Trump succeeds in removing her, he would be able to appoint a replacement, giving his picks a majority on the Fed’s board. That shift could tilt the balance of power over monetary policy and financial regulation, areas traditionally insulated from direct political control.