Federal Reserve Chairman Jerome Powell will attend oral arguments at the Supreme Court for a case in which President Donald Trump is testing the bounds of his power by attempting to fire a member of the central bank’s board of governors.
Powell will attend the hearing, set for Wednesday, a source familiar with his plans confirmed to the Washington Examiner. The move comes just days after the Department of Justice launched a criminal investigation into Powell himself.
DOJ INVESTIGATION COULD PUSH POWELL TO HOLD ON TO HIS SEAT AT FED
Powell’s presence at the Supreme Court could signal further defiance of Trump’s actions toward the Fed. The Justice Department’s open investigation of the Fed chairman is an unprecedented move that Powell has argued is intended solely to influence monetary policy and not because of valid accusations of wrongdoing.
The Supreme Court hearing regarding Federal Reserve Board of Governors member Lisa Cook will be a test of the president’s authority over the central bank. In September, Trump filed an emergency docket asking the high court to decide whether he has the authority to fire Cook for cause. If he succeeds, he will become the first president to fire a Fed governor.
Cook, 61, stands accused by Federal Housing Finance Agency Director Bill Pulte of mortgage fraud, which led Trump to attempt to fire her. Cook successfully sued for a temporary restraining order blocking the move and has participated in Fed meetings since that time.
In the Supreme Court filing calling for a hearing on Cook, Trump’s lawyers asserted the central bank plays a “uniquely important” role in the economy and that it heightens the government and public interest “in ensuring that an ethically compromised member does not continue wielding its vast powers.”
“Put simply, the President may reasonably determine that interest rates paid by the American people should not be set by a Governor who appears to have lied about facts material to the interest rates she secured for herself — and refuses to explain the apparent misrepresentations,” the petition read.
Earlier this month, Powell shocked the financial world when he announced in a video statement that the Justice Department was investigating him. Powell revealed the Fed recently received grand jury subpoenas related to testimony he gave to the Senate last year about renovation cost overruns of the Fed headquarters building in Washington, D.C.
Powell said the inquiry was a pretext to pressure him to lower interest rates, threatening the independence of the Fed.
“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings,” Powell said. “It is not about Congress’s oversight role; the Fed, through testimony and other public disclosures, made every effort to keep Congress informed about the renovation project. Those are pretexts.”
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“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” he added.
Trump has repeatedly pushed Powell and other Fed board members to cut rates well below current levels. He argues that the central bank is holding back the economy by not cutting fast enough, although the Fed contends that lowering rates too much too soon could reignite inflation.