Federal Reserve Chair Jerome Powell, speaking during a news conference on Wednesday following a Federal Open Market Committee (FOMC) meeting in Washington, D.C., justified his decision to attend Fed Governor Lisa Cook's Supreme Court hearing. Powell highlighted the case's potential impact on the central bank's independence, describing it as 'perhaps the most important legal case in the Fed's 113-year history.' He stated that, upon reflection, it would be difficult to rationalize not attending the hearing.
Powell's presence at the oral arguments revolves around whether President Donald Trump can dismiss Cook, who faces allegations of mortgage fraud—claims she disputes. Last week, Treasury Secretary Scott Bessent criticized Powell's attendance, describing it as a 'mistake' in an interview with CNBC, warning that this could politicize the case.
Referencing historical precedent, Powell mentioned former Fed Chair Paul Volcker's attendance at a Supreme Court case in the 1980s, although he did not specify the case, reinforcing the justification for his own attendance.
The Supreme Court hearing, raising concerns about the potential impact on Federal Reserve independence, saw justices questioning the limits of Trump's authority in his attempt to remove Cook. Trump's attempt to dismiss Cook hinges on mortgage fraud allegations, though critics suggest his motivation lies in his desire for lower interest rates. Cook remains in her role, as the Supreme Court permitted her to stay pending the oral arguments.
Powell's attendance at the Court follows revelations of a federal investigation into the renovations at the Fed’s headquarters. Observers and policymakers have linked the inquiry to Trump's ongoing criticisms of Powell for not reducing interest rates swiftly enough.