British News Agency

The case arose after Trump’s attempt last year to oust Cook from the board—an unprecedented move in the Fed’s 112-year history, marking the first time a president has sought to remove a sitting Fed official. To date, lower courts and the Supreme Court have allowed Cook to remain in her position while the litigation proceeds.

However, the case is being closely watched due to its potential impact on the Fed’s independence. Overlaying the legal battle is also a criminal investigation by the Justice Department related to testimony given last June by Fed Chair Jerome Powell before the Senate Banking Committee concerning a multi-year project to renovate the central bank’s headquarters in Washington, D.C.

According to a source with direct knowledge, confirmed to CBS News, Powell—frequently targeted by Trump—is expected to attend the hearings scheduled for Wednesday.

Adam White, a senior fellow at the American Enterprise Institute who focuses on the Supreme Court, said: “We’ve never seen a direct showdown between a president and the Federal Reserve over an attempt to remove Fed governors. We don’t even know what the rules of such a confrontation would be.”

The Federal Reserve Act of 1913 permits the president to remove a member of the Fed’s Board of Governors “for cause,” but does not define the term. Trump invoked this statute last August when he notified Cook by letter that she had been removed. As justification, Trump cited allegations by Bill Pulte, the Federal Housing Director and a senior member of his administration, claiming that Cook made false statements in mortgage documents related to properties in Michigan and Atlanta.

After a divided panel of three appellate judges continued to block Cook’s removal, the Trump administration asked the Supreme Court to intervene and allow the president to dismiss her.

However, the Supreme Court scheduled hearings on the case in October and, while considering Trump’s request for emergency relief, allowed Cook to remain in office. As a result, Cook participated in the Fed’s last two meetings of the committee that sets interest rates. The next meeting is scheduled for late January.