The Supreme Court stepped into a historic clash on Wednesday, weighing President Donald Trump’s unprecedented attempt to fire Federal Reserve Governor Lisa Cook over allegations of mortgage fraud.

The case, argued in a rare oral session, centers on Trump’s push last August to remove Cook, marking the first time in the Fed’s 112-year history a president has tried to oust a sitting governor.

A majority of justices appeared hesitant to back Trump’s position, citing concerns over the central bank’s independence. A decision is expected by July, while Cook remains on the board and continues voting on interest rates.

The dispute has ignited discussion across political and economic spheres, with many questioning whether the president’s authority should extend to dismantling the Fed’s long-standing protections. Critics of Trump’s move argue it risks undermining a critical pillar of economic stability.

Origins of a Historic Fed Conflict

The saga began when Trump fired Cook last August, citing a referral from Federal Housing Finance Agency Director William Pulte to the Justice Department over alleged mortgage fraud, the Hill reported. Pulte claimed Cook listed properties in Michigan and Atlanta as primary residences to secure better financing terms, a charge she firmly denies.

Under the Federal Reserve Act, a president can only remove governors “for cause,” a term left undefined in the statute. All parties agree that interest-rate votes don’t qualify, but Trump’s team, led by Solicitor General D. John Sauer, argues for a broad standard covering conduct and fitness.

Sauer pressed the Court to see Cook’s alleged actions as damaging public trust, stating they “sends the wrong message to the market and to the American people who have to make correct representations to the banks.” But let’s be real—stretching “for cause” this wide could hand any president a blank check to meddle with the Fed over personal gripes.

Justices Signal Caution on Fed Independence

Cook’s attorney, Paul Clement, a respected conservative lawyer who once served under President George W. Bush, countered with a plea for restraint. He argued for a narrower standard—inefficiency, neglect, or malfeasance—warning against upending over a century of central bank autonomy.

Clement told the Court, “There is simply no reason to abandon over 100 years of central bank independence on an emergency application on a preliminary record.” Frankly, he’s got a point; rushing to gut the Fed’s firewall on shaky allegations feels like fixing a leaky pipe with a sledgehammer.

Several justices echoed unease about deciding on a thin record, with some, like Justice Samuel Alito, questioning the rush. Others, including Justice Sonia Sotomayor, hinted at remanding the case to lower courts for deeper review. The Court’s conservative majority, often aligned with Trump’s expansive view of executive power, seems to view the Fed as a unique entity deserving protection.

Trump’s Broader Feud with the Fed

This fight isn’t just about Cook—it’s tangled with Trump’s ongoing frustration over the Fed’s reluctance to slash interest rates to juice the economy. His broader agenda to control independent agencies has Wall Street watching closely, though markets have stayed surprisingly steady, hitting record highs despite the drama.

Investors seem to bet Trump will hit roadblocks in remaking the Fed’s board by fiat, and they’re likely right. The Supreme Court itself noted last May that the Fed is a “uniquely structured, quasi-private entity,” suggesting its historical independence carries weight.

Still, the idea of a president strong-arming the Fed over policy disagreements sets a dangerous precedent. If every rate vote becomes a firing offense, we’re not far from turning the central bank into a political puppet show.

Legal Battles and Due Process Wins

Cook’s legal journey has already notched wins—after suing, a federal judge ruled Trump lacked proper “cause” since the allegations predated her tenure. The judge also insisted on due process, a finding upheld by a 2-1 appeals panel, prompting Trump to escalate to the Supreme Court.

The Court’s unusual choice to hold oral arguments, rather than rule swiftly on an emergency basis, signals they’re treading carefully. And they should—meddling with the Fed’s autonomy isn’t just a bureaucratic spat; it’s a gamble with the economy’s backbone. Let’s hope the justices keep their eyes on the long game, not short-term political wins.