In the case of the Federal Reserve, Supreme Court appears to carve out a murky exception

In January 2026, the Supreme Court heard arguments regarding the Federal Reserve's independence. While the court has previously allowed President Trump to remove heads of other independent agencies, it appears to be making an exception for the Fed. The court signaled it views the Federal Reserve differently, suggesting the president can only remove Fed governors "for cause," such as neglect of duty or malfeasance. This distinction was highlighted in a previous ruling where the court allowed the firing of officials from the National Labor Relations Board and the Merit Systems Protection Board, but differentiated the Fed due to its "uniquely structured, quasi-private entity" status. The case raises questions about the extent of presidential power over independent agencies.

The US Supreme Court will hear arguments regarding Donald Trump's attempt to fire Federal Reserve governor Lisa Cook. Trump's administration alleges Cook committed mortgage fraud, while Cook's lawyers argue she was denied due process and that Fed governors can only be fired "for cause." A lower federal court blocked Cook's removal, and she remains on the Fed board. The Supreme Court's decision will test the limits of presidential power over the independent central bank. This case is part of a broader conflict between Trump and the Fed over interest rate policy, including a controversial Justice Department investigation into Fed Chairman Jerome Powell. Cook was appointed in 2022 and is the first woman of color to serve on the Fed's board.