The Supreme Court will hear oral arguments Wednesday over President Trump's move to fire Federal Reserve governor Lisa Cook — a case that tests the central bank’s independence and could reset precedent.

Via a social media post in August, Trump attempted to fire Cook, the first Black woman to serve as a Fed governor, citing allegations that she committed mortgage fraud. Cook, a Biden appointee, has denied any wrongdoing and sued the president, arguing the law only allows members to be dismissed "for cause."

The bigger question at issue: Will the conservative-leaning court uphold the independence of the central bank by insulating Fed board members from being fired by the president at will?

Read more: How much control does the president have over the Fed and interest rates?

The central bank’s ability to set interest rates based on what’s best for the economy and the job market without interference from the White House is a protocol past presidents have largely chosen to uphold.

The high court suggested in a decision in late May that Federal Reserve board members, including Fed Chair Jerome Powell, were protected from being fired by the president. In that case, the justices allowed other firings, including from the National Labor Relations Board, but went out of their way to carve out the Fed as “a uniquely structured, quasi-private entity” with a “distinct historical tradition.”

However, the justices last month heard arguments in a case surrounding Trump's efforts to remove Democratic appointee Rebecca Slaughter from the Federal Trade Commission, which is also a congressionally created, independent agency like the Fed. The high court signaled it’s ready to rule in a 6-3 conservative majority to strike down a federal law that restricts the president’s ability to fire members of the FTC.

Section 10 of the Federal Reserve Act states that each member of the board shall hold office for 14 years unless sooner removed for cause by the president. The statute does not detail what exactly constitutes "for cause." That term has been interpreted in legal rulings to mean inefficiency, neglect of duty, or malfeasance. Those are the terms that will be dissected Wednesday.

Cook’s lawyers have argued there needs to be some “meaningful check” on the president’s ability to remove her, noting that otherwise “any president could remove any governor based on any charge of wrongdoing, however flawed.”

Since the Fed was established in 1913, a president has never fired a Fed member.

The fight in the nation's highest court comes after US District Judge Jia Cobb last September blocked Trump from firing Cook, saying that the mortgage fraud allegations do not meet the Federal Reserve Act's "for cause" clause needed to remove a central bank official.

The White House appealed that ruling to the US Court of Appeals for the District of Columbia Circuit. But in a 2-1 ruling on Sept. 15, that request was also rejected. The Supreme Court hearing Wednesday is around the technical question of whether to pause Cobb's ruling, allowing Cook's firing to take effect, or keep it in place as litigation continues in the underlying case.

The case was Trump's boldest move to date in an ongoing pressure campaign to force lower interest rates. Indeed, Cook's lawyers say the mortgage fraud allegations are a pretext for ousting her over her stance on monetary policy.

Trump spent much of last year focused on Chair Powell, frequently and loudly demanding lower rates.

Then on Jan. 9, the Justice Department brought grand jury subpoenas against the Fed and opened a criminal investigation into Powell over testimony he gave before the Senate Banking Committee last June on multibillion-dollar renovations of the central bank’s headquarters in Washington.

In a rare appearance and show of how important the case is, Powell plans to attend the oral arguments Wednesday, a person familiar with the matter told Yahoo Finance. Every member of the central bank has backed Cook, while scores of former Fed chairs and economists have also defended Cook and Fed independence.

Wednesday’s arguments come one week before the Fed meets for its next interest rate-setting meeting on Jan. 28, when markets expect the central bank to hold rates steady after cutting rates three times last fall. Cook is expected to participate.

Jennifer Schonberger is a veteran financial journalist covering markets, the economy, and investing. At Yahoo Finance she covers the Federal Reserve, Congress, the White House, the Treasury, the SEC, the economy, cryptocurrencies, and the intersection of Washington policy with finance. Follow her on X @Jenniferisms and on Instagram.

Click here for the latest economic news and indicators to help inform your investing decisions

Read the latest financial and business news from Yahoo Finance