The Supreme Court will hear arguments on Wednesday in a case that could reshape how much control a president has over the Federal Reserve.

The dispute, Trump v. Cook, stems from President Donald Trump’s attempt to remove Federal Reserve Governor Lisa Cook for alleged mortgage fraud. Lower courts have blocked the move, and the Trump administration is asking the Supreme Court to allow the firing to proceed, even as Cook’s legal challenge continues.

At its core, the case asks whether a president can fire a sitting Fed governor, something that hasn’t occurred in the Fed’s 113-year history. The decision could determine how insulated the central bank’s leadership is from political pressure.

Cook was confirmed to the Fed’s Board of Governors in 2022 and serves a fixed term slated to end in January 2038. Under the Federal Reserve Act, governors may be removed only “for cause,” a standard partially intended to prevent presidents from reshaping monetary policy by ousting officials with whom they disagree. Trump, who has publicly berated the Fed for failing to lower interest rates further, argues that allegations tied to Cook’s past mortgage filings justify her removal.

Cook denies wrongdoing and has said the allegations are unfounded. Removing Cook would open a space on the Board of Governors for a Trump appointee.

The United States District Court for the District of Columbia, a lower court, concluded this past summer that Cook was likely to succeed in her claims that her removal didn’t meet the statutory standard and blocked the firing while the case plays out. Trump is asking the Supreme Court to lift that order and allow the removal to take effect now.

Cook’s case may set expectations well beyond her own tenure. The Justice Department is currently i nvestigating Federal Reserve Chair Jerome Powell over his disclosures related to renovations at the Fed’s headquarters. Powell has denied any wrongdoing, and no charges have been filed.

“If the Court rules against Cook, that would significantly raise the probability that Powell could also be removed based on the Justice Department investigation,” Bank of America economist Aditya Bhave wrote in a recent note. “We have been arguing that the Cook case is more important for the policy trajectory than the identity of the next Fed chair. We think that’s even more true now.”

The timing of the Powell investigation could complicate the Trump administration’s broader legal strategy at the Supreme Court, said Carl Tobias, a constitutional law professor at the University of Richmond. The justices, he said, are likely sensitive to signs of gratuitous or politically motivated attacks on the Fed as they weigh issues related to independence and executive power.

Others analysts view the case as a test of presidential authority over the central bank. “The Cook decision will carry immense weight when it comes to any president’s ability to shape the structure of the Fed,” wrote Kevin Gordon, head of macro research and strategy at Charles Schwab.

Market reaction so far has been limited, but investors are watching. “Even though the magnitude of various markets’ moves in response to the Powell news has been limited, the direction—dollar down, stocks down, bonds down—is indicative of how these shocks are to be digested if they persist over the long term,” Gordon wrote.

The administration’s effort to remove Cook rests on criminal referrals sent to the Justice Department by the head of the Federal Housing Finance Agency, alleging misstatements on mortgage documents before Cook joined the Fed. Cook has disputed those claims in detail, saying her filings accurately reflected where she lived at different points in her academic and government career. The Justice Department hasn’t brought charges.

The Supreme Court doesn’t need to resolve those factual disputes to decide the case. What it will decide is whether allegations alone are enough to justify removing a Fed governor, or whether presidents must clear a higher bar before taking that step.

The justices will also likely weigh whether the Federal Reserve should continue to be treated differently from other independent agencies. In recent months, the Court has weakened removal protections at regulators such as the Consumer Financial Protection Bureau. But the Fed has long occupied a distinct place in the system.

If the Court sides with the administration, Trump could remove Cook from office quickly, altering the balance of power between the White House and the Fed. If it leaves the lower court’s ruling in place, Cook would remain on the Board while the case continues.

Either outcome will be closely read as a signal of how much independence the Federal Reserve retains when it comes into direct conflict with a president.

Oral arguments begin on Wednesday at 10 a.m. ET, and will likely go until early afternoon.