Powell rarely attends the U.S. Supreme Court hearing, will "stand for" Federal Reserve Governor Cook on Wednesday
This case concerns the survival of the Federal Reserve's independence: if the ruling allows the president to dismiss a governor "for cause," it will break the 14-year term protection mechanism and set a precedent for political interference in monetary policy. Powell himself is also facing a subpoena investigation from the Department of Justice. His appearance is a public statement to defend the independence of the institution
Federal Reserve Chairman Jerome Powell will appear at the Supreme Court to attend the oral arguments in the case of Lisa Cook, marking a rare public stance.
On January 21, the U.S. Supreme Court will hold oral arguments in the case of Federal Reserve Governor Lisa Cook. According to sources cited by the Associated Press, Powell will be present at the Supreme Court to listen.
Wallstreetcn mentioned that UBS stated in a report on the 16th that this trial concerns the survival of the Federal Reserve's independence. If the court rules that the White House can "for cause" bypass the Federal Reserve Act to remove Governor Lisa Cook, then the legal door for Powell's dismissal will be completely opened.
Previously, the Department of Justice issued a grand jury subpoena to the Federal Reserve and Powell, investigating whether they misled in the management of the Federal Reserve building renovation project and in congressional testimony.
Powell's term as chairman will end on May 15, 2026, but his term as governor will continue until January 31, 2028.
Trump's Public "Showdown" with the Federal Reserve
It all started last August.
Trump publicly declared his intention to fire Federal Reserve Governor Lisa Cook, appointed by Biden, on the grounds that she was involved in mortgage fraud.
Cook denied the allegations and has not been charged to date. She subsequently filed a lawsuit to retain her position. The Supreme Court issued a temporary order last October allowing her to remain in office until the case is resolved.
Wallstreetcn mentioned that last week Powell disclosed that the Trump administration had issued a subpoena to the Federal Reserve and even threatened to bring criminal charges against him personally.
UBS analysts believe that if the government insists on criminally prosecuting Powell and Senate Republicans refuse to advance new nominations, the FOMC is likely to choose to allow Powell to continue serving as a governor after his term as chairman ends, and he may even be re-elected as FOMC chairman, serving as a barrier against Trump's radical interest rate cuts.
The Bet on Independence
The ruling in the Cook case will determine the boundaries of presidential power.
The term of a Federal Reserve governor lasts fourteen years, and they can only be removed early for just cause, a design intended to insulate them from political pressure and ensure the independence of monetary policy.
If Trump's attempt is allowed by the Supreme Court, any future president could follow suit, shaking the foundation of the Federal Reserve's decision-making.
Powell sitting in the hearing indicates that this struggle has transcended personal grievances and escalated into a defense of the rules governing the institution's existence.
What Trump wants is not just a compliant governor's seat, but a Federal Reserve that can execute his will.
Powell sitting there means he is saying no
