There have been a lot of questions asked about Donald Trump’s Supreme Court nominees over the last few years, and more are likely with the battle over the Fed.
There are two major issues taking place right now, that being the investigation into Fed Chair Jerome Powell and the firing of Federal Reserve Governor Lisa Cook.
The Supreme Court seems skeptical of Trump’s authority to maintain the Fed’s independence, and that now includes Justice Brett Kavanaugh, a Trump appointee.
The Trump administration is trying to paint Cook as someone who cannot even balance her own checkbook, let alone be responsible for setting interest rates for the entire country.
U.S. Solicitor General D. John Sauer has characterized her as being “grossly negligent” in her own life, discussing mortgage fraud allegations that have been levied against Cook.
Justice Amy Coney Barrett, a Trump nominee, asked, "We have amicus briefs from economists who tell us that if Governor Cook is" fired, that "it can trigger a recession," Barrett said. "How should we think about the public interest in a case like this?"
She was far from the only justice who had concerns on this front.
When the issue of firing for cause was brought up, Kavanaugh challenged, "There's a very low bar for cause, and one that the president alone determines.”
He continued, "And that would weaken, if not shatter, the independence of the Federal Reserve that we just discussed."
Sauer did not agree, pushing back, "It's our very strong protection because it does protect them from the one thing that Congress was apparently most worried about, which is a removal for policy disagreement.”
The Fed was first created in 1913, and its funding is not provided by Congress. It is completely independent, not relying on presidential or congressional approval for its decisions.
Something else the court will now be considering is an amicus brief that was filed on behalf of every living former Fed chair and Treasury secretary.
The brief stressed the economic concerns of removing Cook that could wreak havoc in this country. The brief was 32 pages in total, and, in part, stated, "Sectors that pay close attention to the Federal Reserve — including the financial markets, the public, employers and lenders — are watching the current dispute over the President’s removal of Governor Cook to judge how credible the Fed will be going forward."
If Cook were convicted of mortgage fraud, I think this would be a completely different issue, but the allegations are being treated like the indictments against former FBI Director James Comey and New York Attorney General Letitia James.
In other words, there are more than a few people who think the allegations were cooked up to suit Trump’s call for Cook to be removed rather than legitimate fraud charges. My gut tells me Trump loses this case, likely in a 6-3 or 7-2 decision.
