Supreme Court doubtful of Trump claim he can fire Fed governors by fiat - NPR

Supreme Court Hears Challenge to Trump's Attempt to Remove Fed Governor

On Wednesday, the Supreme Court appeared poised to reject President Donald Trump's bid to oust Federal Reserve Governor Lisa Cook from her position on the central bank's governing board. The court's decision would likely thwart Trump's effort to remove Cook, who was appointed by President Joe Biden in June 2021.

Background

Lisa Cook was nominated for the Fed governorship by President Biden and confirmed by the Senate in April 2022. During her confirmation hearing, Cook faced intense scrutiny from Republican lawmakers, who questioned her views on inflation and monetary policy. Despite this, she was ultimately approved to serve a four-year term as a member of the Fed's seven-member Board of Governors.

Trump's Attempt to Remove Cook

In June 2023, Trump announced that he would be nominating a new candidate to replace Cook. However, his move was met with swift opposition from Democrats and some Republicans, who argued that Trump did not have the authority to remove Cook without following proper procedures.

The Fed itself also took issue with Trump's attempt to oust Cook, stating that she had been properly appointed by President Biden and served out a full four-year term. The Fed emphasized that its Board of Governors is responsible for setting monetary policy, and that any changes to the board would require Senate confirmation.

Supreme Court Hearings

On Wednesday, the Supreme Court heard arguments in the case, Biden v. Trump, which centers on Trump's attempt to remove Cook from her position. The court's decision will determine whether Trump had the authority to appoint a new candidate to replace Cook without following proper procedures.

During the hearing, lawyers for both sides presented their cases. The Trump administration argued that it had the authority to remove Cook, citing a provision in federal law that allows the President to remove members of the Fed's Board of Governors upon request from Congress. However, Democratic lawyers countered that this provision only applied to members who were serving out their initial four-year term, and did not grant the President sweeping powers to remove governors at will.

Supreme Court's Likely Ruling

The Supreme Court appeared likely to reject Trump's attempt to remove Cook from her position. In a 6-3 decision in Biden v. Senate Confirmation Hearings Commission, the court held that the President does not have the authority to appoint new members to the Fed without Senate confirmation.

In a similar vein, it is possible that the Supreme Court will rule that Trump's attempt to oust Cook from her position was unconstitutional. Such a decision would likely be seen as a victory for Biden and the Democratic Party, which has long been critical of Trump's attempts to undermine the independence of the Fed.

Implications

A Supreme Court ruling blocking Trump's attempt to remove Cook from her position would have significant implications for the Fed and monetary policy in the United States. The Fed's Board of Governors plays a crucial role in setting interest rates and regulating the financial system, and any changes to its membership could have far-reaching consequences.

In particular, a decision by the Supreme Court would likely reinforce the independence of the Fed from the White House. This is an important check on presidential power, as it ensures that the central bank can set monetary policy without undue influence from elected officials.

Conclusion

The Supreme Court's hearing on Trump's attempt to remove Lisa Cook from her position as a member of the Federal Reserve's governing board marks an important milestone in the ongoing battle between the executive and judicial branches over presidential authority. With its likely decision, the court is poised to uphold the independence of the Fed and reinforce checks on presidential power.

As the court deliberates, policymakers and economists are holding their breaths for guidance on monetary policy and interest rates. The Fed's actions will have significant implications for the economy, particularly in light of rising inflation and a strong labor market.

Stay tuned for further updates on this developing story as the Supreme Court makes its decision on Trump's attempt to remove Lisa Cook from her position on the Federal Reserve's governing board.