Fed Chairman Powell Will Go to Supreme Court on Trump’s Efforts to Fire Lisa Cook.

The chairman of the Federal Reserve Jerome Powell will attend oral arguments this week in a Supreme Court case against the President Donald TrumpThe effort of Fed Gov. Lisa Cooka source familiar with the matter tells Realtor.com®.

Powell’s presence at Wednesday’s hearing will heighten the drama of an already high-profile case, with Cook hoping to block Trump’s attempt to impeach him over allegations of mortgage fraud.

Cook, one of the 12 members of the Federal Open Market Committee (FOMC) that sets interest rate policy, was a Biden appointee who has consistently voted alongside Powell on rate decisions, including when the panel overruled Trump’s calls for lower interest rates.

His removal from the FOMC would allow Trump to appoint a successor who agrees with the president’s view that interest rates should be very low, lowering borrowing costs for the government and consumers.

Powell has avoided commenting publicly on Cook’s case, citing the ongoing legal process, but his court appearance may be intended to send a quiet message about the central bank’s independence amid Trump’s low-tax pressure campaign. The Associated Press first reported on Powell’s plans to attend the hearing.

“This is a sign of unity from Chairman Powell,” said Realtor.com Senior Economist Jake Krimmel. “He stood up for Lisa Cook as her everyday colleague, as a fellow member of the FOMC, and as a public servant.”

Trump in August tried to fire Cook over allegations that he committed mortgage fraud by claiming two different places as his primary residence when applying for loans. Cook challenged the move on the grounds that he was not given due process and argued that the allegations were not sufficient grounds for removal.

A lower court judge temporarily blocked Cook’s removal, writing that Cook was “very likely” to succeed in his argument that Trump violated the Federal Reserve by firing him. An appeals court upheld that decision, prompting the White House to ask the Supreme Court to intervene.

After the appeals decision, the White House spokesmanKush Desaitold Realtor.com in a statement that Trump “officially removed Lisa Cook for cause from the Federal Reserve Board of Governors.”

“We look forward to a final victory after presenting our oral arguments at the Supreme Court in January,” he added.

The White House did not immediately respond to a request for comment on Powell’s plans to attend the hearing.

Powell insists on Fed independence as time winds down

Powell’s scheduled appearance at Wednesday’s hearing comes less than a week after he issued an explosive statement revealing he is under criminal investigation by Trump’s Justice Department, calling the move a scare tactic to force lower interest rates.

The central bank chief said the investigation was related to his Senate testimony about the rising cost of repairs to the Fed’s headquarters for several years, calling the allegations “an excuse” for the president’s campaign to hold down interest rates.

Powell vowed to carry out his duties “without political fear or favor” and continue to set interest rates based on the Fed’s dual mandate of price stability and maximum employment.

His comments follow a long campaign of low taxes from Trump, who sees low home prices as the basis for improving housing affordability and has threatened to fire or sue Powell at various points in the past year.

Economist Krimmel says Powell’s presence on Cook’s Supreme Court may be intended to draw parallels between his case and hers.

“Allegations of mortgage fraud in the Cook case and construction cost overruns at Powell are ‘reasonable,’ in the words of the Chairman,” Krimmel said. “By siding with Cook on the Supreme Court, Powell connects the two allegations and builds his case that the administration is trying to steer monetary policy through political pressure and intimidation.”

The Fed uses high interest rates to fight inflation, and low rates to boost the labor market, in keeping with the central bank’s dual mandate.

By law and tradition, price decisions should be free from political influence, and history shows that keeping prices artificially low can wreak havoc on financial markets and the broader economy.

Powell’s term as Fed chairman will end in May, and Trump is expected to announce his nominee for the post in the coming weeks.

However, some Senate Republicans have expressed concern about the DOJ’s investigation into Powell, which could complicate the confirmation process if Trump’s picks are viewed as insufficiently independent.