Fed Drama Heats Up: Powell to Appears at Cook Hearing
Federal Reserve Chairman Jerome Powell is scheduled to appear in person before the US Supreme Court on Wednesday (January 21) for an oral hearing in a case examining whether President Donald Trump can fire Fed Chair Lisa Cook. Powell's move is unusual—a signal of open support from the central bank's chairman for a member of the Board of Governors, amid rising political tensions surrounding the Fed's independence.
The case stems from Trump's attempt to remove Cook under alleged mortgage fraud, allegations Cook denies and which have not yet resulted in an indictment. The Supreme Court previously issued a brief order allowing Cook to remain in office temporarily, before now moving to the crucial oral hearing. The ruling has the potential to set a new "roadmap": whether firing a Fed chair can only be done under the strict "for cause" standard—or instead open the door to further political interference in the central bank.
This also comes shortly after Powell criticized law enforcement for sending grand jury subpoenas to the Federal Reserve, which he said were used as a pretext to suppress interest rate policy—an escalation that has heightened market concerns about the central bank's independence. If Trump succeeds in ousting Cook, he could appoint a replacement and increase the White House's influence over interest rate policy and banking regulation—issues that directly affect the Fed's credibility.
Source: Newsmaker.id
