The Supreme Court’s recent decision in Trump v. Cook seeks to resolve both narrow questions about the Federal Reserve Act’s (FRA) removal protections and the broad question of Federal Reserve independence. That the Court ruled in favor of Governor Lisa Cook was largely expected, even if it came from a slimmer 5-4 majority than some observers were anticipating. Unfortunately, the limited scope of Cook leaves an incomplete answer to the independence question. Instead, the narrow goal of central bank independence the Court seeks to assert in Cook is undermined by the Court’s sweeping rule establishing political control over independent agencies in Trump v. Slaughter for a couple of reasons. The first is that the difficulties of distinguishing monetary policy from other forms of economic regulation muddy the waters around the Fed, especially the status of the Fed’s non-monetary functions. Further, the Court’s framework that situates for-cause removal as the sine qua non of agency independence offers insufficient protection when, as a practical matter, the White House has found various ways to influence the Fed and the Fed’s leadership is at least partially acquiescing in the effort.

The unsatisfying non-resolution to the question of Fed independence yields an important lesson: relying on ex post judicial review and remedies from the same Court that created this situation in the first place is not a durable solution. Instead, preserving Fed independence in the face of increasingly politicized governance requires a more forceful and comprehensive response from Congress and the Fed itself.

What the Cook Decision Says: The Fed’s Status and the Scope of “For Cause”

Chief Justice Roberts’ majority opinion in Cook fleshes out the Court’s justification for its “Fed exception.” In previous orders, the Court’s reasons for treating the Fed as sui generis consisted of a scant few sentences, typically referencing a purportedly unique historical tradition. Unfortunately, Cook does not give us much more to work with. Both the Roberts majority opinion and the concurrence by Justice Brett Kavanaugh rely again on the “historical precedent” of the First and Second Banks of the United States, buttressed by the prudential concern that diminishing Fed independence by allowing Governors to be removed at-will would cause upheaval to the domestic—and, somewhat surprisingly, the global—financial system.

The majority also addresses the specifics of Governor Cook’s removal by offering some high-level guidelines about the meaning of “for cause” in the FRA. The threshold, we are told, must be “substantial” and is based on the “seriousness of the alleged misconduct, and the extent of any nexus that may exist to the Governor’s professional duties,” but ultimately “cannot be reduced to a precise set of rules.” Unsurprisingly, given the underlying facts in Cook, the Court cautioned against “naiveté,” noting that, without meaningful substantive protections, a “perceived or alleged misstep (past or present) could provide a ready pretext” for removal—and this Sword of Damocles would likely hang over each policy decision made by the members of the Board of Governors. The Court also held that Governors subject to a removal determination are entitled to some “explanation of the evidence at issue, some avenue for a response, and a deadline by which a response would be due.”[1]

Far from resolving the status of the Fed once and for all, the opinion’s vagueness raises a number of questions. Chief among these are: (1) whether all of the Fed’s functions are independent, or just its monetary policy; and (2) whether the vague procedural protections are truly sufficient to chasten a White House and Treasury Department bent on influencing central bank policy.

What the Court Doesn’t Say: The Status of Regulatory and Other Functions

As both Justice Thomas and Justice Barrett note in their dissents, the Fed possesses significant regulatory powers that exceed those of the Banks of the United States, are much broader than monetary policy, and are of a piece with the authorities the Slaughter majority held require Presidential oversight. The majority in Cook responds (inaccurately, in my view) that the Banks of the United States indeed possessed regulatory powers, thereby establishing historical precedent for the Fed. It also concedes that the Fed is “more powerful than its predecessors, managing a vastly more complex economy in a vastly more complex world” but there is “no reason . . . why our central bank ought to be trapped in amber.”[2]

This understanding is consistent with the Fed’s historical position, as articulated by former Fed Chairman Ben Bernanke, that all its functions are complementary and essential. For example, its discount window lending and emergency lending powers under section 13(3) of the FRA can, depending on the context, be viewed as monetary policy, financial stability, or bank supervision. The Court seemingly adopts this logic by citing, inter alia, the Fed’s role in monetary policy, bank regulation, and financial stability as justifications, thereby implying every Fed function is independent because the Fed’s other powers are related to monetary policy.

The first implication of the Court’s conflation of these functions bears on litigation by other officials challenging their removals. Specifically, in 2025, President Trump sought to remove the Democratic appointees to the National Credit Union Administration (NCUA), the multi-member regulator of federally chartered credit unions. In holding that removal illegal last July, the district court not only relied on Humphrey’s Executor, but also on the NCUA’s similarities to the Fed, including its “broad regulatory authority,” the same types of civil enforcement powers, and similar use of administrative law judges. In light of Cook, the NCUA plaintiffs are now arguing the attributes identified by the district court demonstrate that the NCUA follows the “same lineage” as the Fed. We will soon see if there are other agencies that enjoy similar status to the Fed, or, more likely, if the central bank is simply one of one (and how that special status can be justified).

More troublingly, the Court’s attempted structural, rather than functional, approach to independence in Cook is already being eroded by President Trump’s newly confirmed Fed Chair, Kevin Warsh. At his confirmation hearing, Warsh said Fed independence is “at its peak in the operational conduct of monetary policy” but independence “does not extend to the full range of its congressionally mandated functions,” including “stewardship of public monies” and bank regulation and supervision. Indeed, the Fed has already functionally ceded much of its independence over regulatory and supervisory policy to the Treasury Department, an approach that is inconsistent with the structural independence established in Cook. This suggests a return to the period of financial deregulation that culminated in the Global Financial Crisis of 2008 (a period during which Warsh served as a member of the Board of Governors), when the Fed hardly displayed independence from the political influences of the Executive Branch and the financial industry.

Warsh’s functional approach also risks creating perceived or real conflicts of interest. One of the ways the Fed serves as a “steward of public monies” is by administering public payment infrastructure. The President has issued an Executive Order urging the Fed to expand access to Fed master accounts to crypto companies, which the Fed has done despite being under no formal legal obligation to do so. If these functions are fundamentally political, can the President influence the Fed’s decision-making if the President’s family’s crypto venture, World Liberty Financial, applies for a master account?

In his majority opinion, Chief Justice Roberts says that, “[n]ot only the fact of independence but also the appearance of independence is key to the Federal Reserve’s design” (emphasis in original). Turning decisions about access to Fed liquidity or central bank payment accounts over to partisan influence will surely undermine the Fed’s perceived credibility as a responsible financial steward.[3]

What the Court Can’t Fix: The White House’s Continued Efforts to Remake the Fed

If the Court hoped that establishing a “substantial” bar to removing Fed Governors, accompanied by some minimal procedural guardrails, would halt the White House’s attempts to influence the Fed, it seems unlikely to have its intended effect. Before the opinion was even issued, the Court was already playing catch-up with a White House that has continued to seek out ways to remake the Fed in the President’s image.

During the pendency of the case, the White House and Treasury Department also reportedly sought to influence the selection process for the President of the Federal Reserve Bank of Atlanta in the hopes of installing a preferred candidate. The reason the Atlanta Fed opening exists is due to concerns that the Board of Governors would block previous President Raphael Bostic’s re-appointment for fear that Bostic’s violations of investment restrictions would open avenues for renewed White House criticism. The desire to avoid potential controversy also led Biden-appointed Fed Governor Adriana Kugler to step down last summer after her husband violated Fed ethics policies.

In contrast to the heightened sensitivities of these non-aligned Fed Governors and Reserve Bank Presidents, Trump appointee Michelle Bowman is facing no apparent White House pressure for having violated the Fed’s communications blackout policy to attend an invite-only event with Wall Street investors. This is the political environment the Fed is currently operating in: those who are disfavored by the White House live under the threat of pretextual removal controversies, while the White House’s allies face little-to-no removal pressure, even when they engage in actions that give rise to a clear appearance of impropriety.

The Court’s new facts-and-circumstances test for for-cause removal seeks to deter pretextual removals, thereby preventing the President from “turn[ing] for-cause protection into little more than at-will employment.” Yet, these recent experiences illustrate how Cook is unlikely—and cannot reasonably be expected—to remove the Sword of Damocles hanging over the Fed. Indeed, there are media reports that the White House is already contemplating ways to take another run at removing Fed Governors—both Governor Cook and potentially also Governor Jerome Powell—in a manner that would comply with the letter, if not the spirit, of Cook.

Conclusion

The Court’s decision in Cook seeks to insulate the Fed from political influence and resolve any “doubt as to the status of one of our Nation’s (and the world’s) most important financial institutions.” But Cook’s narrow, procedural focus is no match for the political environment created by the Court’s broader jurisprudence empowering the President in matters of agency governance. And because the Justices lack the necessary expertise, tools, and ideological commitments, the deep tensions between the political control the Court demands in Slaughter and the independence it seeks to preserve in Cook remain unresolved.

The politicization of independent agencies unleashed by the Court ultimately requires Congress, and the Fed itself, to use the FRA, the advice-and-consent process, general legislative oversight, and other tools to protect the Fed’s authority—and by extension the stability of the global economic order. In other words, the Court has cooked up a new scheme of politicized regulation, now it is up to others to clean up its mess.

Graham Steele is an assistant professor at the University of North Carolina School of Law. From 2021-24 he served as the Assistant Secretary for Financial Institutions at the U.S. Treasury Department, and from 2015-2017 he served as the Minority Chief Counsel for the U.S. Senate Committee on Banking, Housing, and Urban Affairs.

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[1] The various opinions also discuss whether removal decisions are judicially reviewable, whether Governor Cook possesses a “property interest” in her Board seat, and whether the Court should have reached the constitutional removal question or confined itself to the standards for issuing a preliminary injunction. These issues are beyond the scope of this post.

[2] One wonders where this openness to regulatory innovation was in Seila Law, when the Court, in an opinion by Chief Justice Roberts, struck down the removal protections applicable to the Consumer Financial Protection Bureau, an independent subsidiary of the Fed created by Congress in response to, and informed by, the experiences of the Global Financial Crisis in 2008 as an “innovation with no foothold in history or tradition”?

[3] This raises the question of whether a Fed Chair or Fed Governor’s lack of respect for Fed independence and disregard of the FRA would constitute grounds for removal. It is surely a “substantial” matter to subject the legally independent central bank to political control, when the law requires otherwise, and it has a direct “nexus” to the duties of a Fed Governor. But is this the type of “misconduct” the majority envisions, or is it a mere policy disagreement? Can Fed Chairs simply pick and choose when to be independent and when to be political in contravention of the scheme enacted by Congress? What implications would such a scenario of selective independence have for the perception of Fed independence motivating the Court’s decision?