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Supreme Court appears ready to keep Lisa Cook on Federal Reserve board despite Trump efforts to fire her

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Supreme Court appears ready to keep Lisa Cook on Federal Reserve board despite Trump efforts to fire her

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The Supreme Court appeared poised to give President Donald Trump one of his biggest legal setbacks in office, offering strong support Wednesday for Federal Reserve Governor Lisa Cook remaining in her leadership position — at least for now.

The justices debated in their packed courtroom whether Trump has broad unilateral executive authority to fire someone from the central bank, despite its special status as a stand-alone federal agency.

During nearly two hours of oral arguments, a majority seemed to agree the Fed’s unique public-private hybrid structure limited removal without clear “cause,” and that Trump did not meet his legal obligations when seeking Cook’s dismissal for alleged private mortgage fraud.

REPUBLICAN SENATOR VOWS TO BLOCK TRUMP FED NOMINEE OVER POWELL INVESTIGATION

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Federal Reserve governor Lisa Cook and attorney Abbe Lowell, arrive at the Supreme Court in Washington, Wednesday, Jan. 21, 2026. (Mark Schiefelbein/AP Photo)

The case comes before the Supreme Court on an emergency basis — with the government seeking to dismiss Cook now, for as long as the courts decide the matter, a process that could last months.

The justices could decide the larger constitutional questions now or give the lower federal courts a chance for a full examination of the facts, with some guidance from the high court on the standards of “for cause” removal.

In arguments, most on the court seemed skeptical of Trump’s actions.   

“That’s your position that there’s no judicial review, no process required, no remedy available?” Justice Brett Kavanaugh asked Solicitor General D. John Sauer. “Very low bar for cause that the president alone determines. And that would weaken, if not shatter, the independence of the Federal Reserve.”

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“Let’s talk about the real-world downstream effects of this. Because if this were set as a precedent, it seems to me just thinking big picture, what goes around, comes around,” added Kavanaugh, who has typically been an ardent defender of executive power. “All the current president’s appointees would likely be removed for cause on January 20th, 2029 — if there’s a Democratic president or January 20th, 2033. And then, we’re really at, at will removal.”

Others on the bench raised questions of “public confidence” if the president could fire Fed governors without fully explaining or justifying the reasons.

“We have amicus briefs from economists who tell us that if Governor Cook is” fired, asked Justice Amy Coney Barrett, “that it can trigger a recession. How should we think about the public interest in a case like this?”

The Competing Arguments

Cook’s lawyer told the nine-member bench court the Federal Reserve System was created by Congress in 1913 as a wholly independent entity, to insulate it from political influence, and from any one president “stacking the deck” with their own nominees.

The first Black female Fed governor claims to be a political pawn in Trump’s very public efforts to dictate the board’s interest rate policies and by exploiting what she calls “manufactured charges” of wrongdoing.

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GOP SENATOR SUGGESTS FED CHAIR POWELL RESIGN NOW TO DODGE POTENTIAL CRIMINAL INDICTMENT

President Donald Trump speaks with Federal Reserve chair Jerome Powell (R) as he visits the Federal Reserve in Washington, D.C., on July 24, 2025. 

With Cook in the audience as a show of support was Fed Chairman Jerome Powell, whom Trump has also sought to remove in a broader, ongoing feud with the agency over the pace of lowering benchmark interest rates to spur the domestic economy.

But the Trump Justice Department said he had executive authority to seek Cook’s removal, free from judicial review.

Independent Agency Review   

The conservative court has allowed much of Trump’s challenged executive actions to be enforced at least temporarily — including upholding firings of members of the National Labor Relations Board, the Merit Systems Protection Board, the Consumer Product Safety Commission, and the Federal Trade Commission, despite federal laws protecting them against removal without good cause.

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The justices last month heard arguments in a separate case, on Trump’s efforts to remove Democrat-appointed Rebecca Slaughter from the Federal Trade Commission (FTC), which, like the Fed, is a congressionally-created independent, multi-member regulatory agency.

The 6-3 conservative majority in that petition appeared ready to rule for the president when it involves semi-autonomous agencies like the FTC.

But in the Federal Reserve dispute, the high court clearly indicated this institution was different.

In the Cook case, lower courts ruled she did not receive due process when the president tried to fire her.

The current posture of the case is whether Trump can remove Cook — at least temporarily — while the dispute continues to play out on the merits.

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The “for cause” removal restriction’s constitutionality is not directly before the justices, but nevertheless played a key role in the oral argument session.

The Supreme Court could go ahead and settle the competing issues now — which seems unlikely — or leave it to the lower courts to continue hearing the appeal, with guidance on how to proceed.

Focus on the Fed

Though its leaders are appointed by the president and confirmed by the Senate, the seven-member board is considered an independent government agency, since its monetary policy decisions do not need presidential or legislative approval. But the agency does provide Congress with regular reports on its work.

It also does not receive any federal funding, and the terms of the members of the board of governors span multiple presidential and congressional terms.

Under law, the Federal Reserve’s leadership has a three-fold mandate: “maximum employment, stable prices, and moderate long-term interest rates.”

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The 12 Federal Reserve Banks are not part of the federal government, but set up like private corporations, and regionally located across the country.

In arguments, most justices agreed Cook deserved some chance to make her case that a dismissal would be improper.

SUPREME COURT PREPARES FOR MAJOR TEST OF PRESIDENTIAL POWER IN TRUMP EFFORTS TO FIRE FEDERAL RESERVE GOVERNOR

The Supreme Court building in Washington, D.C. (AP Photo/J. Scott Applewhite, File)

“Why are you afraid of a hearing?” asked Justice Amy Coney Barrett, at one point.

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Justice Neil Gorsuch asked: “Let’s, just suppose with me, hypothetically, for the moment, that the court read the act to require notice and a hearing … What would that hearing look like?”

Gorsuch asked if the president could just call Cook into the White House Roosevelt Room. “So just a meeting across a conference table, finish with ‘you’re fired?’”

But Chief Justice John Roberts repeatedly said a hearing on the allegations would serve little use if her only defense is she made an “inadvertent error” on her mortgage application.

The public session also focused extensively on the standards of “cause” that would permit Cook’s dismissal. Several justices suggested the mortgage fraud claims against Cook were not serious enough to trigger emergency action requested by the government to remove her at least temporarily.

Existing statutory removal protections include the so-called “INM standard” — “inefficiency, neglect of malfeasance.”

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“The question becomes, is it grossly negligent to make a mistake on a mortgage application?” said Justice Sonia Sotomayor.

Justice Samuel Alito also asked why the case was handled “in such a hurried manner,” suggesting concern the allegations against Cook have not been properly adjudicated, either by the courts or by the president himself.

In a statement after the hearing ended, Cook said her case is “about whether the Federal Reserve will set key interest rates guided by evidence and independent judgment or will succumb to political pressure.”

The Impact

The Federal Reserve Act (FRA) says the president can only remove members of the Fed board and FOMC “for cause.” The exact parameters of that standard were not spelled out in the original law, and never fully tested in the courts.

Cook — appointed for a 14-year term by former President Joe Biden in 2023 — will remain on the job at least until the court decides the current legal questions.

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SUPREME COURT TEMPORARILY GREENLIGHTS FIRING OF BIDEN-APPOINTED FTC COMMISSIONER

Lisa DeNell Cook is sworn in during a Senate Banking nominations hearing on June 21, 2023, in Washington. (Drew Angerer/Getty Images)

No president has fired a sitting Fed governor in the law’s 112-year history.

She strongly denies accusations of falsely claiming two homes in Georgia and Michigan as her primary residence to secure better mortgage terms. She has not been charged with any crime.

Cook sued the administration last August in a bid to keep her job.

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Just after the court arguments ended, Cook released a statement saying her case is “about whether the Federal Reserve will set key interest rates guided by evidence and independent judgment or will succumb to political pressure.”

The next Federal Open Market Committee (FOMC) meeting is scheduled for January 27 and 28, with an expected interest rate decision. Both Powell and Cook are each set to participate.

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Financial markets, private banks, businesses, and investors will be closely watching what the Supreme Court does in the Federal Reserve dispute, and a separate pending appeal over Trump’s sweeping reciprocal global tariffs.

A written ruling in that import tax case, which was argued by the justices in November, could come at any time.

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The Fed case is Trump v. Cook (25a312). A decision there could come relatively quickly within weeks, or potentially as late as June or early July.

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Video: Senate Republicans Block Limits to Trump’s War Powers

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Video: Senate Republicans Block Limits to Trump’s War Powers

new video loaded: Senate Republicans Block Limits to Trump’s War Powers

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Senate Republicans Block Limits to Trump’s War Powers

Senate Republicans voted against a Democratic bill that would have required President Trump to obtain congressional authorization to continue waging war against Iran.

“The yeas are 47. The nays are 53. The motion to discharge is not approved.” “President Trump decided to attack Iran. That decision was profound, deliberate and correct. The president understands the weight of war.” “Why is Donald Trump hellbent on making history repeat itself? Why is he plunging America headfirst into a war that Americans do not want, and which he cannot even explain? The American people deserve a say, and that is what our resolution is about.”

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Senate Republicans voted against a Democratic bill that would have required President Trump to obtain congressional authorization to continue waging war against Iran.

By Shawn Paik

March 5, 2026

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DHS defends McLaughlin against allegations husband’s company profited millions from ad contracts: ‘Baseless’

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DHS defends McLaughlin against allegations husband’s company profited millions from ad contracts: ‘Baseless’

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EXCLUSIVE: Newly obtained financial statements shed light on claims that former Department of Homeland Security (DHS) Assistant Secretary Tricia McLaughlin’s husband’s company made millions from a DHS advertising campaign.

DHS Secretary Kristi Noem faced intense questioning during a Senate Judiciary Committee hearing Tuesday, and Sen. John Kennedy, R-La., specifically called out the agency for contracting a public relations firm headed by McLaughlin’s husband, Benjamin Yoho.

“I have personally reviewed the allegations against Ms. McLaughlin, and I find them to be baseless,” DHS General Counsel James Percival told Fox News Digital. “Nothing illegal or unethical occurred with respect to these contracts. Ms. McLaughlin was not involved in selecting any subcontractors.

“She is, however, a superstar in the public affairs world, so I am not surprised that she married a successful businessman whose services were attractive to these outside firms.”

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Newly obtained financial statements address allegations that former Department of Homeland Security Assistant Secretary Tricia McLaughlin’s husband’s firm improperly profited from a multimillion-dollar DHS ad campaign. Lawmakers pressed Secretary Kristi Noem over the contracts during a heated Senate hearing. (Jack Gruber/USA Today)

Kennedy alleged that Yoho’s firm, The Strategy Group, “got most of the money” out of what the Louisiana Republican senator says was $220 million in “television advertisements that feature [Noem] prominently.”

“I’m sorry,” Kennedy said. “Safe America Media was a company formed 11 days before you picked them. And that the Strategy Group got most of the money. And the head of that is married to your former spokesperson.”

“It’s just hard for me to believe knowing the president as I do, that you said, ‘Mr. President, here’s some ads I’ve cut, and I’m going to spend $220 million running them,’ that he would have agreed to that,” Kennedy explained. “I don’t think Russ Vought at OMB [Office of Management and Budget] would have agreed to that.”

‘YOU SHOULD BE ASHAMED!’: PROTESTER DRAGGED FROM KRISTI NOEM’S SENATE HEARING

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Senate scrutiny intensified over a DHS advertising campaign after Sen. John Kennedy, R-La., questioned whether a firm linked to McLaughlin’s husband benefited unfairly. DHS officials and the company deny any wrongdoing or multimillion-dollar profits. (Andrew Harrer/Bloomberg via Getty Images)

The Strategy Group is a conservative advertising agency for which Yoho serves as CEO.

Figures obtained by Fox News Digital show a slightly lesser total advertising expenditure of approximately $185 million, with a total of roughly $146.5 million going to a campaign called “Save America.”

However, of the total that went to “Save America,” roughly $348,000 went to production costs, while the remaining $142 million went to “media buys.”

Sources at DHS say that media buys are the cost of actually buying the ads themselves, whether purchased from social media or for a TV ad.

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Kennedy also alleged that the bidding process for the contracts never took place and that Safe America Media’s recent founding was a cause for concern and collusion between McLaughlin and her husband’s business. 

WATCH THE MOST VIRAL MOMENTS AS KRISTI NOEM’S HEARING GOES OFF THE RAILS

Debate over DHS’ “Save America” ad campaign intensified as senators challenged its costs and contractor ties, even as agency officials touted the initiative as a historic success in promoting self-deportation. (Graeme Sloan/Getty Images)

“Yes they did,” Noem responded during the hearing. “They went out to a competitive bid, and career officials at the department chose who would do those advertising commercials.”

The Strategy Group posted to X Tuesday that it never had a contract with the department. While it did receive several hundred thousand dollars for production costs associated with the advertising campaigns, The Strategy Group never made millions.

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“The Strategy Group has never had a contract with DHS,” the post said. “We had a subcontract with Safe America [Media] for limited production services. Safe America paid us $226,137.17 total for 5 film shoots, 45 produced video advertisements and 6 produced radio advertisements.

DHS SPOKESWOMAN TRICIA MCLAUGHLIN TO LEAVE TRUMP ADMIN, SOURCE CONFIRMS

Critics raised concerns about potential conflicts of interest in a high-dollar DHS advertising effort, but department representatives say McLaughlin recused herself and that subcontracting decisions were made independently. (AP Photo/Jose Luis Magana, File)

“If you’re going to try to question our integrity, bring actual evidence — we did,” the post concluded.

Because these ads were purchased using public funds, all contract totals are publicly available. 

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Lauren Bis, who took up the role of assistant secretary once McLaughlin left office, told Fox News Digital Tuesday that scrutiny from Republicans and Democrats over the advertising spending was unjustified because the campaigns resulted in “the most successful ad campaign in U.S. history.”

“Sanctuary politicians are attacking this ad campaign because it has been successful in CLOSING our borders and getting more than 2.2 million illegal aliens to LEAVE the U.S.,” Bis said. 

“The DHS domestic and international ad campaign was the most successful ad campaign in U.S. history. The results speak for themselves: 2.2 million illegal aliens self-deported, and we now have the most secure border in American history.”

KRISTI NOEM TO FACE SENATE GRILLING OVER MINNEAPOLIS SHOOTINGS AS DHS SHUTDOWN HITS WEEK 3

The Trump administration reaffirmed that all illegal immigrants are eligible for deportations as they focus on arresting violent criminals first.  (Raquel Natalicchio/Houston Chronicle via Getty Images)

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Bis also compared the cost of arresting and deporting an illegal migrant to that of the minimal cost of an illegal migrant self-deporting. The department says the advertising campaign played a key role in marketing self-deportation.

A spokesperson at DHS also told Fox News Digital that contractors decide who they hire, fulfilling the terms of a contract, not the department itself. 

“By law, DHS cannot and does not determine, control or weigh in on who contractors hire or use to fulfill the terms of the contract,” a DHS spokesperson told Fox. “Those decisions are made by the contractor alone. We have only become aware of these companies because of this inquiry and did not hire those companies.”

The spokesperson also noted that McLaughlin “recused herself” from interactions with subcontractors to avoid “any perceived appearance of impropriety.”

“Upon hearing who the subcontractors were for production of the ad, Ms. McLaughlin recused herself from any interaction or engagement with any subcontractors to avoid any perceived appearance of impropriety,” the spokesperson continued. “DHS Office of Public Affairs is the program officer. Ms. McLaughlin oversees the DHS Office of Public Affairs, which is simply the vehicle for this contract.”

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Department of Homeland Security Secretary Kristi Noem takes her seat as she arrives to testify during a Senate Judiciary Committee hearing Tuesday on Capitol Hill in Washington, D.C. (Jim Watson/AFP via Getty Images)

McLaughlin told Fox News Digital the criticism of her and her family by senators at the hearing is a matter of public manipulation.

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“This is yet another example of politicians intentionally trying to dupe and manipulate the public to try to manufacture division and anger,” McLaughlin told Fox News Digital. “The ad spend and contracts are a matter of public record, and the process was done by the book.

“These politicians would rather smear private citizens and American small businesses than do any basic research.”

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Fox News Digital’s Alexandra Koch contributed to this report.

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DHS defends ad blitz amid Senate scrutiny, says campaign drove 2.2M self-deportations and saved taxpayers $39B
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Senate rejects war powers measure to withdraw forces from Iran

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Senate rejects war powers measure to withdraw forces from Iran

Senate Republicans blocked a war powers resolution Wednesday designed to withdraw U.S. forces from hostilities in Iran, as the Trump administration accelerates its military campaign in a conflict that has killed hundreds, including at least six American service members.

The motion failed in a vote of 47-53.

In addition to pulling out military resources from the Middle East, the measure — introduced by Sens. Chuck Schumer (D-N.Y.), Adam Schiff (D-Calif.) and Tim Kaine (D-Va.) — would have required Congress’ explicit approval before future engagement with Iran, a power granted to the legislative branch in the Constitution.

The House, where Republicans also hold an advantage, is scheduled to weigh in on a similar measure Thursday. Even if both Democratic-led measures were to succeed, President Trump was widely expected to veto the legislation.

“We are doing very well on the war front, to put it mildly,” President Trump said at a White House event on Wednesday afternoon. The president, who has come under scrutiny for offering shifting explanations on the war’s endgame, said that if he was asked to scale the American military operation from one to 10, he would rate it a 15.

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Democrats dispute that Trump possesses the authority to wage the ongoing operation in Iran without explicit congressional approval.

Acknowledging the measure was unlikely to succeed, they framed the vote as a strategy to force lawmakers to put their support for or opposition to the war on record.

“Today every senator — every single one — will pick a side,” Schumer said. “Do you stand with the American people who are exhausted with forever wars in the Middle East, or stand with Donald Trump and Pete Hegseth as they bumble us headfirst into another war?”

Senate Majority Leader John Thune (R-S.D.) and most of his Republican colleagues have maintained that the president carried out a “pre-emptive” and “defensive” strike in Iran, giving him full authority to continue unilateral military operations.

Republicans saw the vote as the “last roadblock” stopping Trump from carrying out his mission against the Islamic Republic.

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“I think the president has the authority that he needs to conduct the activities and operations that are currently underway there. There are a lot of controversy and questions around the war powers act, but I think the president is acting in the best interest of the nation and our national security interests,” Thune said at a news conference.

Senators largely held to party loyalties, with the exception of Kentucky Republican Rand Paul, who broke ranks to support the measure, and Pennsylvania Democrat John Fetterman, who opposed it.

The vote comes as Defense Secretary Pete Hegseth said Wednesday that the war against Iran is “accelerating,” with American and Israeli forces expanding air operations into Iranian territory. He pointed to evidence released by U.S. Central Command of a submarine strike on an Iranian warship, and also lauded other strikes throughout the region as civilian casualties in Iran surpassed 1,000 on the fourth day of the conflict, according to rights groups.

“We’re going to continue to do well,” Trump said Wednesday. “We have the greatest military in the world by far and that was a tremendous threat to us for many years. Forty-seven years they’ve been killing our people and killing people all over the world, and we have great support.”

Republicans blocked a similar war powers vote in January after the president ordered U.S. special forces to capture and extradite Venezuelan President Nicolás Maduro in Caracas on drug trafficking charges.

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GOP leaders argued that the outcome of that mission equated to a quick success in the Middle East, despite an uncertain timeline from the Department of Defense.

In the House, lawmakers will vote on a separate war powers effort Thursday. That bill is led by Rep. Ro Khanna (D-Calif.) and Rep. Thomas Massie (R-Ky.), the two lawmakers who authored the Epstein Files Transparency Act.

“Instead of sending billions overseas, we need to invest in jobs, healthcare, and education here,” Khanna said on X.

In addition to that proposal, moderate Democrats in the House have introduced a separate resolution that would give the administration a 30-day window to justify continued hostilities in the Middle East before requiring a formal declaration of war or authorization from Congress.

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