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Supreme Court hears arguments over Trump bid to oust Fed governor Cook

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Supreme Court hears arguments over Trump bid to oust Fed governor Cook

WASHINGTON (AP) — President Donald Trump’s unprecedented bid to reshape the Federal Reserve board is putting the Supreme Court in a familiar position, weighing an emergency appeal from the president’s lawyers in a politically charged case.

The court is hearing arguments Wednesday over Trump’s effort to oust Federal Reserve governor Lisa Cook based on allegations she committed mortgage fraud, which she denies.

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

The true motivation, Trump’s critics say, is the Republican president’s desire to wrest control of U.S. interest rate policy. Trump wants interest rates to fall sharply so the government can borrow more cheaply and Americans can pay lower borrowing costs for new homes, cars or other large purchases, as worries about high costs have soured some voters on his economic management.

Fed Chair Jerome Powell and the board cut a key interest rate three times in a row in the last four months of 2025, but that’s more slowly than Trump wants. The Fed also suggested it may leave rates unchanged in coming months, concerned about triggering higher inflation.

Powell is expected to be in attendance when the justices take up an emergency plea from the Trump administration to be allowed to remove Cook from her job while her challenge to the firing plays out in court. Judges on lower courts have allowed her to remain in her post as one of seven central bank governors.

If Trump could name someone to take Cook’s place, he would have four of his appointees on the seven-member board. Cook, the first Black woman to serve on the Fed’s governing board, was appointed in 2022 by President Joe Biden, a Democrat.

The justices are being asked to effectively bless Trump’s effort to undermine the Fed’s independence, said Columbia University law professor Lev Menand, who has joined a brief in support of Cook.

“This case is about much more than Cook,” Menand said. “It’s about whether President Trump will be able to take over the Federal Reserve board in the coming months.”

The threat to the Fed’s independence spurred Powell’s three living predecessors, Alan Greenspan, Ben Bernanke and Janet Yellen, to weigh in on Cook’s behalf. They were joined by five former Treasury secretaries appointed by presidents of both political parties and other former high-ranking economic officials.

In their filing, lawyers for the former officials wrote that immediately ousting Cook “would expose the Federal Reserve to political influences, thereby eroding public confidence in the Fed’s independence and jeopardizing the credibility and efficacy of U.S. monetary policy.”

Economists warn that a politicized Fed that caves in to the president’s demands will damage its credibility as an inflation fighter and likely lead investors to demand higher rates before investing in U.S. treasuries.

With Cook’s case under review at the high court, Trump dramatically escalated his confrontation with the Fed. The Justice Department has opened a criminal investigation of Powell and has served the central bank with subpoenas.

Powell himself took the rare step of responding to Trump, calling the threat of criminal charges “pretexts” that mask the real reason, Trump’s frustration over interest rates. The Justice Department has said the dispute is ostensibly about Powell’s testimony to Congress in June over the cost of a massive renovation of Fed buildings.

In Trump’s first year in office, the justices generally, but not always, went along with Trump’s pleas for emergency action to counteract lower-court rulings against him, including allowing the firings of the heads of other governmental agencies at the president’s discretion, with no claim that they did anything wrong.

But the court has sent signals that it is approaching the independence of the nation’s central bank more cautiously, calling the Fed “a uniquely structured, quasi-private entity.”

In Cook’s case, Trump is not asserting that he can fire Fed governors at will.

Cook is one of several people, along with Democratic New York Attorney General Letitia James and Democratic Sen. Adam Schiff of California, who have been accused of mortgage fraud by federal housing official Bill Pulte. They have denied the allegations against them.

The case against Cook stems from allegations she claimed two properties, in Michigan and Georgia, as “primary residences” in June and July 2021, before she joined the Fed board. Such claims can lead to a lower mortgage rate and smaller down payment than if one of them was declared as a rental property or second home.

Cook has denied any wrongdoing and has not been charged with a crime. “There is no fraud, no intent to deceive, nothing whatsoever criminal or remotely a basis to allege mortgage fraud,” a Cook lawyer, Abbe Lowell, wrote to Attorney General Pam Bondi in November.

Cook specified that her Atlanta condo would be a “vacation home,” according to a loan estimate she obtained in May 2021. In a form seeking a security clearance, she described it as a “2nd home.” Lowell wrote that the case against her largely rests on “one stray reference” in a 2021 mortgage document that was “plainly innocuous in light of the several other truthful and more specific disclosures” about the homes she has purchased.

U.S. District Judge Jia Cobb ruled that the Trump administration had not satisfied a legal requirement that Fed governors can only be fired “for cause,” which she said was limited to misconduct while in office.

Cobb also held that Trump’s firing would have deprived Cook of her due process, or legal right, to contest the firing.

By a 2-1 vote, a panel of the federal appeals court in Washington rejected the Trump administration’s request to let Cook’s firing proceed.

At the Supreme Court, the administration argues Cook has no right to a hearing and courts have no role to play in reviewing Trump’s actions.

Trump lawfully fired Cook, Solicitor General D. John Sauer wrote, “after concluding that the American people should not have their interest rates determined by someone who made misrepresentations material to her mortgage rates that appear to have been grossly negligent at best and fraudulent at worst.”

Sauer will face off against Paul Clement, a conservative lawyer who served in Sauer’s role under President George W. Bush and has argued for expanding gun rights, against same-sex marriage and for striking down the Affordable Care Act. Both men once worked as law clerks for Justice Antonin Scalia.

Cook’s fate should not be determined by “untested allegations” or “before any facts are found,” her lawyers told the court. She should be able to remain in her job at least while her case proceeds, they wrote.

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AP Economics Writer Christopher Rugaber contributed to this report.

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Follow the AP’s coverage of the U.S. Supreme Court at https://apnews.com/hub/us-supreme-court.

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The Dictatorship

The Latest: US and Israel attack Iran as Trump says US begins ‘major combat operations’

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The Latest: US and Israel attack Iran as Trump says US begins ‘major combat operations’

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‘It’s fantastic’: Trump tells MS NOW he’s seen celebrations after Iran strikes

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President Donald Trump called the celebrations in the streets of Iran “fantastic” following the killing of the country’s supreme leaderAyatollah Ali Khamenei, during a brief phone call with MS NOW on Saturday night.

Trump told MS NOW that he’s seen the celebrations in Iran and in parts of America, after joint U.S.-Israel airstrikes killed Khamenei.

“I think it’s fantastic,” the president said of the celebrations. “I’ve seen them in Los Angeles, also — celebrations.”

“I’ve seen them in Los Angeles, celebrations, celebrations,” Trump said, accentuating the point.

The interview took place roughly 11 hours before the Pentagon announced the first U.S.military casualties of the war. U.S. Central Command said three American service members were killed in action, and five others had been seriously wounded.

Revelry broke out in Iran, the United States and across the globe on Saturday, with Iranians cheering the death of Khamenei, who led Iran with an iron fist for more than 30 years, cracking down on dissent at home and maintaining a hostile posture with the U.S. and Israel.

Asked how he was feeling after the strike on Khamenei, whose death was confirmed just a few hours earlier, Trump said it was a positive development for the United States.

“I think it was a great thing for our country,” he said.

The call — which lasted less than a minute — came after a marathon day, which began in the wee hours of the morning with strikes on Iran and continued with retaliatory ballistic missiles from Tehran targeting Israel and countries in the Middle East region that host U.S. military bases.

The day ended with few answers from the White House to increasing questions about the long-term future of Iran, how long the U.S. will continue operations there, and the metastasizing ramifications it could have on the world stage. In fact, the president has done little to convince the public to back his Iran operation, nor to explain why the country is at war without the authorization of Congress.

On perhaps the most consequential day of his second term, Trump did not give a formal address to the public, nor did he hold a press conference. Instead, he stayed out of public view at Mar-a-Lago, his private club and residence in Palm Beach, Florida, where he attended a $1 million-per-plate fundraising dinner on Saturday evening.

But throughout the day, Trump took calls from reporters at various new outlets, including from MS NOW at around 11 p.m. ET.

The strikes, known formally as “Operation Epic Fury,” came after months of talks over Iran’s nuclear program, and warnings from Trump that he would strike Tehran if they did not agree to his often shifting conditions.

At 2:30 a.m. ET on Saturday, Trump posted a video to social media announcing the operation, which he said was designed to “defend the American people by eliminating imminent threats from the Iranian regime, a vicious group of very hard, terrible people.”

“The lives of courageous American heroes may be lost and we may have casualties. That often happens in war,” Trump said when he announced the strikes on Iran.

Mychael Schnell is a reporter for MS NOW.

Laura Barrón-López covers the White House for MS NOW.

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Pentagon announces first American casualties in Iran

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Pentagon announces first American casualties in Iran

Three U.S. service members were killed and five seriously wounded as the United States and Israel launched attacks on Iran, U.S. Central Command said Sunday morning.

The three service members — the first Americans to die in the conflict — were killed in Kuwait, a U.S. official said.

Several others sustained minor injuries from shrapnel and concussions but will return to duty, the Pentagon said. The identities of the dead and wounded have not been made public.

“The situation is fluid, so out of respect for the families, we will withhold additional information, including the identities of our fallen warriors, until 24 hours after next of kin have been notified,” Central Command said in a statement.

The U.S. and Israel launched sweeping airstrikes on Iranon Saturday, killing Ayatollah Ali Khameneithe country’s supreme leader for nearly four decades. Iran has vowed retaliation and hit several U.S. military bases across the region.

According to U.S. Central Command, Iran has also attacked more than a dozen locations, including airports in Dubai, Kuwait and Iraq, and residential neighborhoods in Israel, Bahrain and Qatar.

Israel Defence Forces said Sunday that Iran fired missiles toward the neighborhood of Beit Shemesh, killing civilians. The missile hit a synagogue, killing at least nine people, according to the Associated Press.

AP reported that authorities said at least 22 people were killed and 120 others wounded when demonstrators tried to attack the U.S. Consulate in Karachi in Pakistan.

The violence came after the United States and Israel attacked Irankilling its Supreme Leader Ayatollah Ali Khamenei. Police and officials at a hospital in Karachi said that at least 50 people were also wounded in the clashes and some of them were in critical condition.

On Sunday, Israel Defence Forces said on X, “It’s official: All senior terrorist leaders of Iran’s Axis of Terror have been eliminated.”

President Donald Trump told CNBC’s Joe Kernen on Sunday that the operation in Iran is “moving along very well, very well — ahead of schedule.”

In a phone call with MS NOW late Saturday, Trump called the celebrations in the streets of Iran “fantastic” following the killing of Khamenei.

Confirming Khamenei’s death, Prime Minister Benjamin Netanyahu said Sunday: “We have eliminated the tyrant Khamenei and dozens of senior figures of the oppressive regime. Our forces are now striking at the heart of Tehran with increasing intensity, set to escalate further in the coming days.”

The exchange of hostilities comes after weeks of fragile negotiations between the U.S. and Iran over Iran’s nuclear operations.

Esmail Baghaei, a spokesperson for Iran’s foreign ministry, called the joint U.S-Israeli attack an “unprovoked, unwarranted act of aggression” in an interview with MS NOW’s Ali Velshi on Sunday. He said Iran’s nuclear program has been used a pretext for the attack.

“We have every right to defend our people because we have come under this egregious act of aggression,” Baghaei said.

Trump announced the attack early Saturday during a short video posted on his Truth Social account. He called for an end to the Iranian regime and urged Iranians to “take back the country.”

Negotiators and mediators from Oman were supposed to meet in Vienna on Monday to discuss the technical aspect of a potential nuclear deal.

Rep. Eric Swawell, D-Calif., told MS NOW’s Alex Witt on Sunday afternoon that the president’s military operation in Iran was illegal, echoing what many lawmakers have said in citing that under the U.S. Constitution only Congress can declare war.

“This is a values argument. We don’t just lob missiles into other countries when we are not provoked, attacked and have no plan for what comes next,” he said.

“We have been shown zero evidence that anything changed in Iran from last year when the president did not come to Congress and took a strike on Iran,” Swalwell said.

In June the U.S. struck three Iranian nuclear sites. Trump said the facilities had been “completely and totally obliterated.” But experts and U.S. officials said the sites were damaged but not destroyed.

Erum Salam is breaking news reporter for MS NOW, with a focus on how global events and foreign policy shape U.S. politics. She previously was a breaking news reporter for The Guardian and is a graduate of Texas A&M University and the Columbia University Graduate School of Journalism. Follow her on X, Bluesky and Instagram.

Akayla Gardner is a White House correspondent for MS NOW.

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