After a year of decisions and emergency orders that have generally expanded President Donald Trump’s ability to remove leaders of “independent” federal bodies, the U.S. Supreme Court is indicating that the Federal Reserve may be treated differently. In recent months, the justices have repeatedly suggested that while presidents can dismiss some agency officials for virtually any reason, members of the Fed’s Board of Governors can be removed only “for cause,” a standard commonly understood to require misconduct, neglect of duty, or comparable malfeasance.
That distinction is now under direct scrutiny in a dispute tied to Federal Reserve Governor Lisa Cook, whom the Trump administration has sought to remove. During oral arguments on Wednesday, Jan. 21, 2026, the court appeared inclined to keep Cook in her role while the broader legal fight proceeds, signaling caution about steps that could reshape the Fed’s traditional insulation from short-term political pressure.
How The Court Has Treated Other Agencies
The current debate follows earlier court action involving officials at other independent agencies. The justices previously allowed the administration, at least temporarily, to remove Gwynne Wilcox of the National Labor Relations Board and Cathy Harris of the Merit Systems Protection Board. Those officials had argued that if they could be fired, the same logic would allow a president to dismiss central bank policymakers as well. The court rejected that comparison, describing the Fed as a “uniquely structured” and “quasi-private” institution with historical roots distinct from modern regulators.
In the Cook matter, Justice Brett Kavanaugh warned that letting the dismissal move forward could “weaken, if not shatter” the Fed’s independence. But even as several justices signaled concern about the consequences for monetary policy credibility, they largely avoided pinning down a clear legal principle explaining why the Fed should be protected when other agencies are not.
The Missing Legal Theory, And Critics Of The Distinction
That unanswered question has drawn sharp reactions from scholars who study administrative law and financial regulation. Jane Manners of Fordham University argued the court has not established a sound historical basis for separating the Fed from other entities Congress designed to operate independently. Peter Conti-Brown of the University of Pennsylvania was even more blunt, calling the attempt to differentiate the Fed from other independent agencies “hocus pocus.”
The uncertainty is heightened by signals the court has sent in other disputes. The justices recently indicated they may permit the president to remove FTC Commissioner Rebecca Slaughter, and the conservative majority has suggested it could overturn a 90-year-old precedent that has constrained presidential firing power over certain independent-agency officials. Chief Justice John Roberts and other members of the majority have expressed sympathy for the “unitary executive” view, which holds that the president should maintain broad control over executive-branch staffing and supervision.
Competing Views Of What The Fed Does
Supporters of a Fed carve-out have pointed to the nature of central banking. The court’s conservative bloc has suggested that core monetary policy—setting short-term interest rates and managing the money supply—has not traditionally been directed by the White House in the way that enforcement and regulatory decisions at other agencies can be. In a brief filed in the Cook case, Aaron Nielson of the University of Texas contended that, unlike the modern Federal Trade Commission, the Fed’s central task is monetary policy, which he argued does not necessarily require the exercise of executive power. He also cited the historical First and Second Banks of the United States as predecessors that conducted early monetary functions without being conventional executive-branch agencies.
Other experts dispute that framing. Lev Menand of Columbia University argued the Fed does exercise executive power through bank regulation, and that monetary policy is intertwined with that regulatory role. Menand also contended that the Constitution recognizes only three categories of governmental authority—legislative, executive, and judicial—and that there is no separate category into which the Fed can be placed.
The court’s immediate task is narrower than the long-term constitutional debate: it will first decide whether Cook can remain on the Board while lower courts consider the merits of the attempted removal. During the argument, the government’s top Supreme Court advocate, D. John Sauer, acknowledged the “for cause” limitation for Fed governors, while Paul Clement, representing Cook, argued that the administration’s acceptance of a Fed distinction in this case complicates its push to remove her now.
