The trend of President Donald Trump to act first and then asked recently when he became the first president in the history of the United States to say goodbye to a member of the Federal Reserve Board (FED).
The dismissal of federal employees by Trump is nothing new: thousands were fired, including agencies directors who, like the Fed, are designed to be isolated from presidential control.
But by dismissing Lisa Cook, Trump entered a sea of legal issues and challenged the entrenched beliefs about the president’s power to control the US economy.
Trump’s action, of being ratified by the courts, would disrupt the centennial practice of the Fed to formulate the country’s monetary policy without political pressures. It could also affect the budget of all US homes, since the cost of goods and services would be more influenced by political ideology than by financial experience.
As an expert in American courts, I think, depending on how they resolve the case, it could also mark a significant change in the ability of the Judiciary to control the Executive Power.
This agency is different
The dispute with Cook was made public on August 20, 2025, when Bill Abrete, director of the Federal Housing Financing Agency (FHA), appointed by Trump, announced on social networks that he had filed a criminal complaint to the Department of Justice about a possible mortgage fraud by Cook. Subsequently, the Department of Justice opened an official investigation.
After the announcement of pulte, Trump published: “Cook must give up, now!” She refused and was officially fired by Trump five days later.
Cook filed a lawsuit before a federal court on August 28, asking the Federal District Judge Jia Cobb to issue an emergency order that prevented its dismissal. The dispute continues.
Among the multitude of cases about Trump’s capacity to fire employees from federal agencies, this is different, because the agency is different.
Created by Congress in 1913 after a series of banking phanics, the Fed is in charge of managing the national economy. It acts as a National Bank, supervises the health of other financial institutions and, most importantly, it develops monetary policy, which includes the fixation of interest rates, the main tool with which it manages inflation and guarantees long -term economic growth and stability.
Precisely due to the power of the Fed, the presidents have tried to influence it frequently. The harsh criticism of its members are not new. Trump maintains a continuous and very public dispute with the president of the Fed Board of Directors, Jerome Powell, about interest rates.
But that a president dismisses a member of the Board is something completely different.
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Supreme Court Warning
The Federal Reserve is only one of the dozens of the so -called “independent agencies.” These are part of the Executive Power, but were designed by Congress to operate isolated from the president’s preferences and pressures. Over time, precisely because of its power, the ability of the Federal Reserve to act independently of the president has become particularly sacred.
The main mechanisms through which Congress guarantees the independence of agencies are the “dismissal provisions”, statutory directives that define when and why the president can dismiss his managers. The Law of the Federal Reserve, the law that creates the Federal Reserve and establishes its structure and mission, establishes that the members of the Board, called “governors”, comply with 14 -year mandates, “unless the president dismisses them before with justified cause”.
The expression “with justified cause” can be familiar, since its appearance in another law also recently triggered litigation. This happened when Trump dismissed the directors of two other independent agencies: Gwynne Wilcox, of the National Board of Labor Relations, and Cathy Harris, of the Merit Systems Protection Board. The Supreme Court ruled in April that the restriction to the president’s power to fire the two directors of independent agencies violated article 2 of the Constitution.
However, in that same opinion, the Court was careful to specify that its ruling did not apply to the Federal Reserve Board. When qualifying the Fed as “quasiprexed agency with a unique structure” and a “distinctive historical tradition”, most indicated to Trump to expel members of the Federal Reserve Board was unacceptable.
When he fired Cook, Trump breached this directive. A legal battle was inevitable.
What is behind the case?
The case is complex and involves questions about whether Cook’s dismissal violates a Congress Law and the due process of the Constitution of the United States.
It should be noted that the parties do not discuss the constitutionality of the dismissal clause itself, as they did in the Wilcox case. On the other hand, the dispute focuses mainly on the meaning of “with cause”, that is, what reasons can legally justify the dismissal of a governor of the Board. Unlike other laws, which use additional terms such as “inefficiency, negligence or poor performance of duty during the exercise of the position”, the Federal Reserve Law offers no more guidance.
Trump argues that the alleged mortgage fraud is sufficient cause to dismiss Cook, particularly an agency responsible for administering the country’s finances. Cook states that the mere accusations about their private behavior before their appointment at the Board do not justify their dismissal, especially when these accusations seem to be a pretext for a political disagreement.
But after this apparently insignificant dispute by a single word in a law of 111 years of age, fundamental issues are hidden on the separation of powers, controls and counterweights, and what branch of the Government dictates the law.
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‘Say what the law is’
Trump’s most complete argument is, in reality, quite bold.
As he does in other demands, the president affirms that he, and only him, can determine the meaning of “cause.” The term writes their lawyers, is “broad” and its meaning lies entirely in the president, attributed by Congress. No court can question his trial.
The statement is shocking and seems to go against the country’s peso and counterweight system. In addition, if the government branch responsible for applying the law – the Executive Power – can also define it, the separation of powers also seems to be forgotten.
Cook replicates that the judicial review of dismissal decisions is crucial.
If the courts abandon their responsibility in this case, they argue, they will cancel the independence of the Fed and submit the national economy to the short -term whims of a president, instead of the long -term vision of the economic experts.
And given the clear and continuous acquiescence of Congress to the wide assertions of power of this president, they would also eliminate what, at least until the next presidential elections, could be the last remaining control over the Executive Power.
The case will probably reach the Supreme Court this fall, and the result is difficult to predict. Trump has benefited from a series of victories in that court, promoted by a conservative majority that firmly believes in the Executive Power and the judicial deference to the President.
At the same time, it will be difficult to ignore the opinions about the independence of the Fed that those same conservative judges expressed in the Wilcox case and the possible economic consequences that a ruling could generate in favor of Trump.
The final decision of the court could actually depend on the role he wants to play in the weakened democratic system of the country. The legendary president of the Supreme Court, John Marshall, wrote in 1803 that it is “emphatically competence and duty of the Judiciary to say what the law is”, a feeling registered in the marble wall of the building of the Supreme Court in Washington DC
This case provides the opportunity to see if the maxim is still valid.
*Claire B. Wofford She is an associate professor of Political Science, College of Charleston
This text was originally published in The Conversation
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