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Supreme Court appears skeptical of Trump's attempt to fire Federal Reserve official
Mortgage rates, retirement savings and the global economy are all on the line as the Supreme Court considers whether President Donald Trump has the power to fire board members of the Federal Reserve.
WASHINGTON - Mortgage rates, retirement savings and the global economy are all on the line as the Supreme Court considers whether President Donald Trump has the power to fire board members of the Federal Reserve.
Even the court's most conservative justices appeared frustrated with this case, and Trump's effort to oust Lisa Cook, a Biden-appointed Senate-confirmed member of the Fed's Board of Governors.
Trump claims Lisa Cook lied on a mortgage application, and he should be able to fire her without process or a right to be heard. Cook denies any wrongdoing.
Watch the arguments here
The backstory:
The Federal Reserve is the nation’s central bank. It sets the interest rates and directs the entire country's monetary policy. The agency’s decisions impact everything from mortgage rates to retirement savings.
When Congress created the Federal Reserve in 1913, it said a governor on the board is limited to 14 years and can only be removed "for cause."
Those provisions are supposed to shield the Federal Reserve from political influence and ensure its independence — independence that is critical to maintain the confidence of the American public and the markets.
Some economists told the court justices that if they side with Trump here, it would trigger a recession that could potentially trip up the global economy.
Dig deeper:
On Wednesday, the justices grappled with whether those details even matter because this particular case isn't about the merits of whether Trump has the power to fire Cook.
All the justices have been asked to decide is whether to grant the administration's emergency request to pause a lower court order that keeps Cook in her job for now.
"It's never good to hear that the decisions, either of presidents or Supreme Courts, could nuke the global economy, but the justices' willingness to actually think about what the practical consequences of their rulings might be and what the practical consequences of embracing Trump's executive authority ideas would be is something that's been sorely missing in the courts handling of executive power cases," said Thomas Wolf with the Brennan Center for Justice.
We can expect a decision in the case by late June or early July — perhaps sooner, given the emergency posture — but there are several of those emergency requests on the court's docket right now, including tariffs.