The Supreme Court is deliberating whether President Donald Trump has the authority to remove Cook, as he indicated he would in late August, in an unprecedented move to unseat one of the seven members of the Fed’s governing board. According to a source familiar with the situation who requested anonymity, Powell intends to attend the high court’s session on Wednesday.
This represents a more overt show of support than Powell has previously extended to Cook. However, it comes after Powell’s statement last week regarding the subpoenas issued by the Trump administration, which carry the threat of an unprecedented criminal indictment against the Fed Chair. Powell — who was appointed by Trump in 2018 — seems to be shifting from last year’s more subdued reaction to Trump’s repeated criticisms of the central bank towards a more confrontational public stance.
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On Jan. 11, Powell released a video condemning the subpoenas as “pretexts” for Trump’s attempts to compel him to significantly lower the Fed’s key interest rate. Powell oversaw three rate cuts late last year, bringing the rate down to approximately 3.6%, while Trump argues it should be as low as 1%, a stance that is not widely supported by economists.
The Trump administration has accused Cook of mortgage fraud, a claim that Cook has refuted. No charges have been filed against her, and she has filed a lawsuit to retain her position. The Supreme Court issued a brief order on Oct. 1 allowing her to remain on the board while her case is under consideration.
If Trump succeeds in ousting Cook, he could appoint someone new to her position, giving his appointees a majority on the Fed’s board and greater sway over the central bank’s policies on interest rates and banking regulations.
