On Wednesday, the Supreme Court heard arguments that could reshape the global financial system. The case before the justices asks a deceptively simple question: Can the President of the United States fire Dr. Lisa Cook, a member of the Federal Reserve Board of Governors, before the end of her statutory term?
But everyone watching — from Wall Street traders to central bankers in Europe and Asia — knows the real question: Can President Trump fire Federal Reserve Chairman Jerome Powell and, by doing so, end the Fed’s independence?
A Target for Removal
Dr. Cook, the first Black woman ever to serve on the Fed’s Board of Governors, faced pressure to resign last year after President Trump seized on an allegation of mortgage fraud made by a member of his administration to justify her removal. No criminal charges were filed against her. No wrongdoing was proven. Dr. Cook refused to step down. That refusal — and the lawsuit she filed to defend her position—now stands as the last legal barrier between the Trump administration and its stated goal of bending America’s central bank to presidential will.
Why the Federal Reserve’s Independence Matters
I spent a little over three years working at the Federal Reserve’s Office of Board Members. I later managed a Congressional subcommittee overseeing the Fed. I learned how the institution works, how it moves, how carefully it guards its independence, and perhaps most importantly, its profound focus on its work to advance the public good.
I vividly remember the agony that staff and Fed governors endured over single words in speeches or congressional testimony, fearing how they could send bond markets into a frenzy. These experiences are why I believe what is unfolding now is unprecedented, dangerous, and likely to turn on whether one woman holds her ground—and whether the Supreme Court is willing to stand with her in defense of an independent monetary system.
Inside the Supreme Court’s Warning Signs
The weight of the moment, and what it will mean for the global economy was clear from who sat in the room. Among the attendees for the hearing were former Federal Reserve Chairman Ben Bernanke and Current Federal Reserve Chairman Jerome Powell. Both appointed by Republican presidents, both responsible for navigating economic crisis, both appreciating what this decision could mean for the future of U.S. monetary policy.
While the legal arguments in the court turned in several directions — the monetary policy point of federal reserve independence was front and center. Justice Sotomayor noted that in the Federal Reserve’s 112-year history, a Federal Reserve Officer has never been removed and “the unprecedented nature of this case is a part of what the president did, not what Ms. Cook did.”
Justice Kavanaugh explored the slippery slope: if this precedent stands, what prevents the next president from removing all Fed officials appointed by predecessors, effectively turning Fed governors into at-will employees by 2033? He warned, “What goes around comes around.” The spiral of questions that followed from Kavanaugh to the Administration’s solicitor general left an impression of a justice unsatisfied in what he was hearing and a likely favorable Ruling for Dr. Cook.
What Congress Heard That the Court Didn’t
However, there was something glaringly absent in the courtroom but ever present — the economic impact of the Court’s decision. For that point, there was a different hearing held just a week prior.
Last week, a previously scheduled Congressional Task Force on Monetary Policy hearing revealed just how much this issue transcends normal politics and policy. Following the announcement of the criminal probe into Chairman Powell and before the hearing, House Financial Services Committee’s Republican Chairman French Hill, came out to rebuke the Trump Administration’s Department of Justice. Remarkably during the hearing, while there was not unanimity on the error of the Administration; there was also not full-throated defense in that hearing room for DOJ’s actions.
When Central Banks Lose Independence
The witnesses were former senior Fed officials; economists who by nature are cautious, measured, and precise. When pressed by Democratic members, the former head of Monetary Policy for the Board, Dr. William English, was uniquely candid in the way only an economist who helped set interest rates for nearly two decades can be. Dr. English warned that when central bank independence erodes, inflation typically follows, citing Turkey as a recent example. Pressed further, he acknowledged that such erosion also poses a risk, on the margins, to the U.S. dollar remaining the world’s reserve currency.
The Dollar’s Dominance Is at Stake
Dr. English chose his words carefully, as economists do. But the implications are stark. The risks to the U.S. are different from Turkey’s — they’re far greater. When Turkey’s central bank lost independence, the lira collapsed. But Turkey isn’t the world’s reserve currency. If the Federal Reserve loses credibility, the dollar’s global dominance is at stake. While no clear alternative to the dollar exists today, that’s not guaranteed to last. That means higher borrowing costs for the U.S. government, American businesses, and American families.
Some argue unelected officials shouldn’t wield such enormous economic power without accountability. It’s a serious concern and having supported Congressional accountability of the Fed, I have seen how important oversight is. The historical record is clear: when presidents control monetary policy, short-term political pressures overwhelm clear economics. The result is inflation spirals that hurt ordinary families most. The Fed’s independence is about protecting Americans.
Sometimes the most radical act is simply to stay put.
What the justices must decide is whether one woman’s courage to defend the institution matters more than a president’s power. It’s fitting that the Supreme Court hears this case during the week we honor Martin Luther King Jr.’s birthday. Like Rosa Parks, who understood that her refusal to give up her seat on a Montgomery bus was about far more than one woman’s comfort, Dr. Cook’s refusal to resign is about far more than one woman’s career. Parks challenged a system that relied on compliance to survive. Cook is defending an entire system of economic governance. Both understood that sometimes the most radical act is simply to stay put.
After the Supreme Court hearing, I was able to see Dr. Cook in a room of supporters and friends, along with members of her legal team. What was clear in the room and from those around her is this case is about more than her and this moment. Her refusal to be fired carries consequences far beyond herself. Families concerned about grocery prices who will never know her name could feel the reverberations of the high court’s ruling at their dinner table.
Eric Morrissette, Joint Center Senior Fellow and former Acting Under Secretary of Commerce under the Biden-Harris Administration, overseeing the Minority Business Development Agency