Federal Reserve Chairman Jerome Powell speaks at a press conference after the Federal Open Market Committee (FOMC) meeting in Washington, DC on December 10, 2025.
Saul Loeb | AFP | Getty Images
Federal Reserve Chairman Jerome Powell on Wednesday explained his decision to attend the controversial Supreme Court hearing of Fed Governor Lisa Cook, saying the case could have major implications for the central bank’s independence.
“This case is probably the most important case in the Fed’s 113-year history,” Powell said Wednesday at a press conference after the Fed’s board meeting. “When I thought about it, I realized it might be difficult to explain why I didn’t participate.”
Mr. Powell last week attended oral arguments in a case to determine whether President Donald Trump can remove Mr. Cook, who was accused of mortgage fraud, an allegation Mr. Powell denies. Treasury Secretary Scott Bessent said in an interview with CNBC last week that Powell’s decision to attend was a “mistake” and that the Fed chair was politicizing the matter.
Powell also noted that former Fed Chairman Paul Volcker “famously” filed a lawsuit before the Supreme Court in the 1980s, but did not say which one. He said this shows there was precedent for Powell to attend.
The Federal Reserve System was established in 1913 under President Woodrow Wilson.
During the hearing, Supreme Court justices appeared skeptical of Mr. Trump’s claim that he had the authority to try to remove Mr. Cook from office, and expressed concern about what such precedent would mean for the Fed’s independence.
Trump cited allegations of mortgage fraud in firing Cook, but critics say the move appears to be tied to Cook’s push for lower interest rates. The Supreme Court previously allowed Cook to remain in office pending oral arguments.
Powell’s appearance follows the announcement earlier this month that he is facing a federal investigation into renovations to the Fed’s headquarters. Politicians and monetary policy watchers have linked the investigation to President Trump’s repeated criticism of Powell for not lowering interest rates at a faster pace.
Mr. Powell’s criminal investigation and the attempt to fire Mr. Cook have raised concerns that the Fed’s longstanding apolitical stance is in jeopardy.
Chairman Powell said at a press conference Wednesday that political separation of the Fed is key to ensuring its credibility over the long term.
“The whole point of independence is not to protect policy makers or anything like that,” Powell said. “It’s just that all developed economies (and) democracies around the world have accepted this common practice.”
If we lose this separation, he says, “it will be difficult to restore the credibility of the institution.”
Looming over Wednesday’s news conference was the realization that President Trump could at any time announce a replacement for Powell, whose term as chairman ends in May. Mr. Powell offered timely advice to the next person taking on the role.
“Don’t get caught up in elected politics,” Powell said. “Please stop.”
