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Donald Trump made "you're fired" a national catchphrase from his TV show "The Apprentice." Now the power of the president to unilaterally decide who can continue to serve in key government positions will be tested Wednesday at the U.S. Supreme Court, in another major case over leadership removals from independent agencies.
At the center of the latest constitutional showdown is Lisa Cook, who serves precariously on the Federal Reserve's powerful Board of Governors.
Trump claims broad authority to force Cook from her leadership position on the central bank, free from judicial review, with his administration alleging she committed private mortgage fraud.
Oral arguments will be conducted by the nine justices, who will hear separately from lawyers representing Cook and the Justice Department.
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As the elected head of the government, Trump believes federal law allows him unqualified discretion to fire "for cause" any officer on the Federal Reserve's Board of Governors or member of the Federal Open Market Committee (FOMC).
But Cook will tell the court the Federal Reserve was created by Congress in 1913 as a wholly independent entity, to insulate it from political influence, and from any one president "stacking the deck" with their own nominees.
She claims to be a political pawn in Trump's very public efforts to dictate the Federal Reserve's economic policies, by exploiting what she calls "manufactured charges" of wrongdoing.
This appeal comes as Trump's feud with the Fed has expanded, after its chairman, Jerome Powell, disclosed recently the agency was subpoenaed by the Justice Department for allegations he lied to Congress about a controversial multimillion-dollar renovation of the agency's headquarters.
The high court will have at least four opportunities this term to define the limits of Trump's aggressive view of his authority, including import tariffs and birthright citizenship.
"A big fraction of the Supreme Court's docket will present the question, can President Trump do: fill in the blank? And that could be imposed tariffs. Fire board members. Remove illegal aliens," said Thomas Dupree, a former top Justice Department attorney and leading appellate attorney. "Trump is pushing at every limit and the Supreme Court this term is going to be telling us whether he's exceeded those limits. That is, I think, going to the story of so much of what the Supreme Court is deciding this term."
The conservative court has allowed much of President Trump's challenged executive actions to be enforced at least temporarily - and will now decide whether the Fed's special mandate statutorily protects its governing members from getting ousted.
The justices last month heard arguments in a separate case, on Trump's efforts to remove Democrat-appointed Rebecca Slaughter from the Federal Trade Commission (FTC), which like the Fed is a congressionally created independent, multi-member regulatory agency.
The 6-3 conservative majority in that petition appeared ready to rule for the president when it involves semi-autonomous agencies like the FTC.
Justice Sonia Sotomayor at argument accused the administration of trying to "destroy the structure of government."
But Justice Neil Gorsuch countered that when it comes to agencies like the FTC, "there is no such thing in our constitutional order as a fourth branch of government that's quasi-judicial and quasi-legislative."
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Both Slaughter and Cook were named to their current staggered terms by former President Joe Biden, but Slaughter and another Democratic-appointed member are now not allowed to continue serving while their lawsuits are decided.
In the Cook case, lower courts ruled she did not receive due process when the president tried to fire her.
The current posture of the case is whether Trump can remove Cook - at least temporarily - while the dispute continues to play out on the merits. The "for cause" removal restriction's constitutionality is not directly before the justices.
A federal judge had issued a preliminary injunction against the administration, which then sought relief from the Supreme Court on the limited enforcement issue.
The nine-member bench now has the option of ruling narrowly on the injunction question - which would throw the case back to the district court. Or the high court could go ahead and decide the larger constitutional matters.
One key argument topic could center on whether the Federal Reserve has some administrative nexus to the executive branch, which could put it at least under limited Trump control.
Though its leaders are appointed by the president and confirmed by the Senate, the seven-member board is considered an independent government agency, since its monetary policy decisions do not need presidential or legislative approval. But the agency does provide Congress with regular reports on its work.
It also does not receive any federal funding, and the terms of the members of the board of governors span multiple presidential and congressional terms.
Under law, the Federal Reserve's leadership has a three-fold mandate: "maximum employment, stable prices, and moderate long-term interest rates."
The 12 Federal Reserve Banks are not part of the federal government, but set up like private corporations, and regionally located across the country.
The justices, in an unsigned order in a separate case in 2025, had suggested the Fed operates differently from other independent federal boards, since it is not funded by Congress through normal appropriations, but uses interest on securities the bank owns and acquired through open market operations.
"The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States," said the Supreme Court in May 2025.
After paying its expenses, the Federal Reserve hands the rest of its earnings over to the U.S. Treasury.
Trump repeatedly has blasted Powell and the Federal Reserve over reluctance to lower benchmark interest rates as aggressively as the president wants, in a fundamental disagreement over prudent ways to stimulate the national economy.
Like Cook, Powell in an extraordinary video statement Sunday accused the president of investigating him as "pretexts" for "political pressure or intimidation."
"The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president," he said.
Trump on Tuesday called Powell "either incompetent or crooked."
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Powell's term as chairman ends in May, but he has the option of remaining on the Board for another two years. Trump has been conducting a very transparent interview campaign with candidates for Powell's successor to lead the central bank.
The high court will try to cast all the Washington drama aside and focus on what shapes up as a major test of executive and judicial power.
The Federal Reserve Act (FRA) says the president can only remove members of the Fed board and FOMC "for cause." The exact parameters of that standard were not spelled out in the original law, and never fully tested in the courts.
Cook - appointed for a 14-year term by Biden in 2023 - will remain on the job at least until the court decides the current legal questions.
No president has fired a sitting Fed governor in the law's 112-year history.
"Put simply, the president may reasonably determine that interest rates paid by the American people should not be set by a governor who appears to have lied about facts material to the interest rates she secured for herself- and refuses to explain the apparent misrepresentations," said Solicitor General D. John Sauer in the administration's appeal.
The Justice Department will argue that removal protection power is discretionary and unenforceable.
But Cook's lawyers counter, "Granting that relief would dramatically alter the status quo, ignore centuries of history, and transform the Federal Reserve into a body subservient to the President's will."
The court's decision to take up the case comes months after U.S. District Judge Jia Cobb issued a preliminary injunction last month blocking Trump from firing Cook from the Fed while the case continued to play out in court."
The U.S. Court of Appeals for the D.C. Circuit voted 2-1 in September 2025 to deny Trump's request for intervention, prompting the administration to make its case to the Supreme Court for emergency review.
The Supreme Court update comes as Trump has for months pressured the Federal Reserve to slash interest rates, in a bid to help spur the nation's economic growth.
But his attempt to fire Cook for alleged mortgage fraud violations, which she has denied, has teed up a first-of-its-kind judicial clash that could have profound impacts on the Fed itself, and the Supreme Court's review authority.
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She strongly denies accusations of falsely claiming two homes in Georgia and Michigan as her primary residence to secure better mortgage terms. She has not been charged with any crime.
Cook's legal team - featuring prominent conservative attorney and former Justice Scalia law clerk Paul Clement - sued Trump in late August 2025 for his attempt to fire her, arguing it violated her due process rights under the Fifth Amendment, as well as her statutory right to notice and a hearing under the FRA.
She has not been charged with any criminal act.
The next Federal Open Market Committee (FOMC) meeting is scheduled for Jan. 27-28, with an expected interest rate decision. Both Powell and Cook are each set to participate.
Financial markets, private banks, businesses and investors will be closely watching what the Supreme Court does in the Federal Reserve dispute, and a separate pending appeal over Trump's sweeping reciprocal global tariffs.
A written ruling in that import tax case, which was argued by the justices in November, could come at any time.
The Fed case is Trump v. Cook (25a312). A decision there could come relatively quickly within weeks, or potentially as late as June or early July.
