| The Federal Reserve’s announcement on interest rates tomorrow may prove to be far less consequential for the central bank than another pending decision over which it has no say. Hanging over this week’s Federal Open Market Committee meeting is the legal drama surrounding President Donald Trump’s attempt to fire Fed Governor Lisa Cook.  Trump Photographer: Bonnie Cash/UPI If the legal system rules in Trump’s favor, it could effectively shatter the main safeguard for the central bank’s independence in setting monetary policy from the whims of the White House, a principle established in the Federal Reserve Act of 1913. A divided appeals court affirmed yesterday that Cook can remain in her position at the Fed while her lawsuit challenging the president’s attempt to remove her works its way through the courts. The Trump administration plans to appeal that ruling to the Supreme Court — though it’s not yet known when White House lawyers will actually file, nor whether a ruling could come before the Fed’s rate-setting committee meeting concludes tomorrow around lunchtime in Washington. Whatever the Fed says tomorrow about interest rates undoubtedly has the potential to move markets. Not only are they widely expected to cut their benchmark for the first time this year — as concerns over the labor market build — but also will publish updated projections on the path for interest rates over the next few years, for the first time since June. Read More: The bigger question is how markets would react in the event that Trump prevails in court. So far, market moves surrounding the case have been almost imperceptible. But a win for the White House against Cook, given the wide-ranging implications, would likely finally start to move the needle. Even if the Supreme Court agrees with the appeals court and allows her to stay in her job for now, that might prove only a temporary victory for Cook and the Fed. Trump could still be allowed to remove Cook for cause when the full case is decided. Trump’s demands for massive rate cuts this year have been relentless, but Fed officials will likely continue to project a much more cautious descent than what the president is asking for. Asked today as he departed for a state visit to the UK whether the Fed should be independent, Trump said: “It should be, but I think they should listen to smart people like me.” — Matthew Boesler | 
