Warsh faces key tests as Fed legal battle heads to Supreme Court

The Supreme Court could rule as soon as Monday on whether Lisa Cook keeps her seat on the Federal Reserve Board, just as Kevin Warsh prepares for a high-profile debut at the European Central Bank’s Sintra forum. The parallel tests will shape how investors judge the Fed’s independence, and how much leverage a president can exert over interest-rate policy.

The ECB’s annual Forum on Central Banking runs from June 29 to July 1 in Sintra, Portugal, under the theme “Shaping Europe’s future: innovation, growth and stability.” The in-person meeting draws central bank governors, academics, market participants and journalists, and Warsh is listed in the program for the opening dinner and introductory session. He was sworn in as Fed chair and a Board member on May 22 after Senate confirmations on May 12 and May 13, and his chair term runs through May 21, 2030.

The legal fight over Cook has become the sharper political test. Donald Trump announced on Aug. 25, 2025 that he was removing Cook, citing allegations about misstatements on a mortgage application. Cook said she would not resign and challenged the move. The Supreme Court heard Trump v. Cook on Jan. 21 and later allowed her to remain in office while the case proceeds, after lower courts said she was likely to win. The dispute turns on whether Fed governors can be removed only for cause, a protection written into the Federal Reserve Act of Dec. 23, 1913 but never clearly defined by the courts.

That question reaches well beyond one board seat. The Federal Reserve Board has seven governors, and those officials sit at the center of the institution’s policymaking structure. If the Court broadens presidential removal power, it would raise fresh doubts about how insulated the Fed can stay from White House pressure on rates, especially after Trump repeatedly demanded deeper cuts.

Market expectations already show the tension. A Reuters poll on June 26 found economists expected the Fed to hold its benchmark rate steady for the rest of 2026, even as inflation remained above 4%, more than double the Fed’s target. That backdrop makes Warsh’s early months more than a ceremonial start: his first major international appearance comes as the Court is deciding whether the Fed’s independence remains a hard legal constraint or a political one.