This Supreme Court case is really about Trump

On Wednesday, the Supreme Court prepares to hear arguments in a crucial case over the independence of the Federal Reserve, Trump v. Cook. But it won’t even be the first decisive moment that the country’s main economic institution has had in recent weeks.

President Donald Trump’s effort to seize control of the Federal Reserve and its power to set interest rates intensified last Sunday when Fed Chairman Jerome Powell announced that he had received “grand jury subpoenas” and been threatened with a “criminal indictment” related to cost overruns in the central bank building restoration project.

Powell immediately backed away. The Justice Department’s claim that it had lied in congressional testimony about the project was a mere “pretext” that had to be seen “in the broader context of the administration’s ongoing threats and pressure,” Powell said.

“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will benefit the public, rather than following the president’s preferences,” Powell said.

That is, to a large extent, what is also behind Trump v. Cook, which apparently deals with Trump’s right to fire Federal Reserve Board Governor Lisa Cook.

Trump, desperately seeking to fulfill his campaign promise to reduce inflation, has been urging the Federal Reserve to radically cut interest rates for months. But the organization has refused and has instead reduced fees at a more measured pace. Since Federal Reserve governors are protected from removal for any reason other than misconduct, Trump had no direct way to pressure them to do so or replace them with more docile officials. So the Justice Department obtained an indictment against Cook on trumped-up charges of mortgage fraud, giving the president an excuse to fire her.

Cook filed suit, claiming that the allegations against him did not meet any standard that would allow for expulsion for cause, and even if they did, he was denied due process to challenge the charges against him before his expulsion. Two lower courts sided with Cook, but Trump appealed to the Supreme Court.

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There is a lot at stake. The question is whether Trump can trump up criminal charges against Federal Reserve officials to seize control of the central bank, one of the most powerful institutions in the world.

“A Trump takeover will mean the Federal Reserve can set interest rates to please a president who wants to stimulate the economy before the midterm elections, regardless of what happens to inflation,” said Sen. Elizabeth Warren (D-Mass.), who sits on the Senate Banking and Finance Committees.

Trump’s control over the Federal Reserve could also “accelerate” banking deregulation and lead to more “taxpayer bailouts and devastating financial crises,” Warren said. But that’s not all.

“Once Trump controls the majority of the Federal Reserve, he will be able to use the Fed’s vast powers to enrich himself personally, reward his billionaire friends, and punish his enemies,” Warren said. “That has been their strategy throughout the government.”

Therefore, a Supreme Court ruling in Trump’s favor would further legitimize his authoritarian politicization of the executive branch’s prosecutorial power, while giving Trump even more autocratic power to repress.

That repressive power would come if the White House had control of the Federal Reserve’s vast powers to lend money, buy assets, approve bank mergers and unseat institutions. This could serve as a way to spend money on the administration’s priorities without Congress, which nominally has budget power, playing any role.

“Monetary levers can be abused to lend money, buy assets to advance the administration’s priorities, and allow the administration to evade the checks of the legislature, which, under our constitutional system, is supposed to have the power of the treasury,” said Lev Menand, a law professor at Columbia Law School and former Treasury Department adviser.

Rohit Chopra, former head of the Consumer Financial Protection Bureau, detailed examples of how Trump could abuse this authority.

“What happens if a bank doesn’t lend to a key White House ally?” Chopra said. “Will they face losing access to the Federal Reserve’s primary lending programs? Or what if they don’t cooperate on a key issue on the president’s agenda? Do they have to worry about going unbanked?”

These concerns are not unreasonable. They are what is at the center of Cook’s case before the Supreme Court.

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The Trump administration argues that the charges against Cook, no matter how trivial, true or related to his work at the Federal Reserve or not, qualify as cause for his removal. The administration also argues that there is no process to challenge a removal for cause and courts cannot second-guess the president’s decision to remove an official for cause.

It is clear that if these arguments are accepted, Trump would be empowered in his attempt to take control of the Federal Reserve by using the Department of Justice as a weapon, even if he has no support for ending the central bank’s independence.

The Federal Reserve maintains its independence through removal-for-cause protections for its board of governors. Those same removal-for-cause protections for other independent agency heads are under threat before the Supreme Court in Slaughter v. Trump, on whom the judges have not yet ruled.

In that case, the court’s six conservative justices will surely affirm the unitary executive theory and hand Trump near-total control of the executive branch by ruling that for-cause removal protections for independent agency officials are unconstitutional.

At the same time, conservative justices seem reluctant to extend such a ruling to the Federal Reserve. Instead, as they telegraphed in a parallel 2025 ruling in Trump v. Wilcox, they are likely to construct an ahistorical exception to protect the Fed for political reasons. That exclusion not only makes no sense, since the structure of the central bank’s board is no different from the Federal Trade Commission, the agency at issue in Slaughter, but it also highlights the general problem with the unitary executive theory that the justices are embracing.

“If the judges are paying attention, they should see that this president is an example of what is so dangerous about a system of government that allows the president to invoke his inherent authority to overturn duly enacted legislation,” Menand said.

Mimicking the tactics of modern autocrats in countries such as Hungary, Turkey, Venezuela and Russia, Trump has abused the power of the Justice Department by fabricating false accusations against his political enemies, including mortgage fraud against Cook and New York Attorney General Letitia James, perjury against former FBI Director James Comey, as well as investigations into California Democratic Senator Adam Schiff and Representative Eric Swalwell.

But using the criminal justice system to seize control of the central bank by investigating or prosecuting Powell and Cook goes a step beyond the actions of most of the world’s modern autocrats.

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“It’s an autocratic move, but it’s a little extreme to attack someone who is a technocrat by going after him internally rather than waiting for him to leave and replace you,” said David Driesen, a constitutional law professor at Syracuse University who studies the rise of modern autocracies. “It’s what dictators do, but a little extreme for what dictators do.”

In countries like Türkiye, Hungary and Venezuela, autocratic leaders did not need to resort to such machinations to take control of their central banks. They gained the power to remove the heads of agencies with some semblance of independence, including central banks, after the legislature or the public enacted constitutional or legal changes.

Following constitutional amendments passed in 2017, Turkish President Recep Erdogan began dismissing central bank governors who did not adopt his unorthodox economic views. Hugo Chávez of Venezuela took control of his country’s central bank in 2007. In both cases, sky-high inflation followed, as leaders stimulated the economy for their immediate political benefit.

“We’ve never seen this in the United States,” said Cristina Bodea, a political science professor at Michigan State University who studies monetary policy.

Previous presidents have taken on the Federal Reserve, but never with such a determined goal of overthrowing its members.

The most infamous example is probably that of President Richard Nixon. firm hand of President Arthur Burns to reduce interest rates before Nixon’s re-election campaign in 1972. The result then, as has happened in almost every country where an autocrat took control of the central bank, was higher inflation.

Like Nixon and Burns, Trump wants the Federal Reserve to slash interest rates to improve economic conditions and therefore Republicans’ electoral standing in the 2026 midterms. But the way Trump is approaching this “doesn’t make sense,” Bodea said. Instead, he argues, Trump could achieve smaller reductions in interest rates with a lighter touch than threatening or initiating lawsuits.

“The only way this makes sense is as part of a broader erosion of the rule of law,” Bodea said. “Even autocrats have to comply in some way or they have to repress more significantly.”

But it may be Trump’s repression that undoes his quest for more repression. According to Menand, the attack on Powell provides the court with context that reveals the political nature of the Cook investigation and prosecution.

“That the president is there trying to push a criminal investigation against the president of the board and proceed against other members of the board, everything tends to suggest that e goal here is to take over the Federal Reserve instead of finding out if Lisa Cook committed a removable crime here.”