(Washington) The Supreme Court appeared Wednesday in favor of maintaining in office until further notice a governor of the Federal Reserve (Fed) whom Donald Trump wants to get rid of, in a case considered crucial for the independence of the American central bank.
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In August, the American president announced the dismissal of Lisa Cook, one of the seven members of the Board of Governors of the Federal Reserve, but she obtained from the courts the right to remain in office until a decision was made on the merits.
The decision of the Court, predominantly conservative, is expected by the end of its annual session at the end of June.
The standoff between the executive branch and the Fed has become all the more tense as the president of the central bank, Jerome Powell, whose departure Donald Trump openly wants, revealed ten days ago to be personally targeted by an investigation by the Department of Justice.
The investigation focuses on his testimony before Congress on the costs of renovating the Fed headquarters. Jerome Powell, whose mandate expires in May, then denounced an “unprecedented” approach in the “broader context of threats and constant pressures exerted by the government”, which is calling for a reduction in interest rates.
Like Lisa Cook, Jerome Powell attended the hearing in person, a presence interpreted as a mark of support for his colleague.
“Good cause”
Donald Trump had invoked, under the “valid cause” required by law to dismiss a Fed governor, accusations of fraud for a personal real estate loan taken out by Mr.me Cook.
The first black woman to this position, appointed under Democrat Joe Biden, Lisa Cook, whose mandate runs until January 2038, denies any wrongdoing.
“Americans’ interest rates should not be set by someone who has been, at best, grossly negligent in securing more favorable interest rates for herself,” Trump administration legal counsel John Sauer said at the opening of the proceedings.
But the nine justices of the Supreme Court – six conservatives and three progressives – showed their reluctance to be seized of this file at this stage of the procedure and their concern about the risk of undermining the independence of the Federal Reserve.
“Is there any reason why this whole thing should have been handled by everyone, the executive branch, the trial court and the court of appeal, in such an expeditious manner? », sighed conservative judge Samuel Alito.
They were alarmed by the consequences of a decision favorable to the Trump administration, which defends a maximalist position according to which justice would not be empowered to control the legality of such a revocation or to remedy it if necessary.
Accepting these arguments “would weaken or even destroy the independence of the Federal Reserve,” warned Brett Kavanaugh, another conservative judge.
A future Democratic president could, upon taking office in 2029 or 2033, “remove for cause” all officials appointed by Donald Trump, he stressed.
“Market Confidence”
Lisa Cook’s lawyer, Paul Clement, insisted on the “unique” nature of the Federal Reserve.
“The confidence that the president has in each governor is less important than the confidence that the markets and the population must have in the independence of the Fed vis-à-vis the president and Congress,” he argued.
“As long as I serve on the Federal Reserve, I will respect the principle of its political independence in the service of the American people,” Lisa Cook said in a statement released after the two hours of debate.
Several judges raised the possibility of sending the case back to lower courts while retaining Mr.me Cook for now.
If the conservative majority has until now granted Donald Trump great latitude to dismiss heads of federal agencies, it nevertheless took the trouble in May to clarify that these decisions did not concern the governors of the Federal Reserve, underlining the “unique” character of this institution.
