The Federal Reserve's independence faces a "trial of the century," with Governor Cook scheduled to debate on Wednesday whether he is involved in loan fraud.

According to Mars Finance, on January 19th, the most significant test of independence the Federal Reserve has faced in its more than a century of existence will be presented to the U.S. Supreme Court this week. The focus is on whether the justices will, as Congress expects, protect the world's most important central bank from political influence, or allow President Trump to "clean house" at will. The case reportedly revolves around Trump's attempt to fire Federal Reserve Governor Cook on allegations of mortgage fraud (before she took office). This case, in extreme cases, could erode the Fed's cherished independence; even if it doesn't reach that point, it could provide the first "operational guide" on how a president can remove someone from this tightly protected central bank governing body. The Supreme Court is scheduled to hold oral arguments on January 21, 2026 (this Wednesday). Analysts say this has never been tested in court before, and if the requirements are strict enough, this provision, once specified, could confirm the central bank's independence, but could also provide a target for a scheming government. The Trump team's argument is essentially that "just cause" is determined by the president, a standard that seems to bring Federal Reserve governors one step closer to being "arbitrarily" fired. Jon Faust, a former senior advisor to Powell and former Fed Chair Yellen and now a professor of economics at Johns Hopkins University, said he worries that even if Cook keeps his job, given the Supreme Court's support for the Trump administration on many other issues, the outcome will weaken the Fed's shield against political pressure.