A coalition of former Treasury chiefs, Fed chairs, and senior White House economists has stepped into the legal battle over Lisa Cook. They urged the Supreme Court to block President Donald Trump’s attempt to fire her from the Federal Reserve Board.
In a court brief, the bipartisan group warned that removing Cook would shatter the Fed’s independence, a cornerstone of economic stability, and risk driving up inflation while weakening growth.
“There is broad consensus among economists, based on decades of macroeconomic research, that a more independent central bank will lead to lower and more stable inflation without creating higher unemployment,” the filing stated. “Independent central banks also help increase confidence in the stability of the U.S. dollar, enabling the United States, businesses, and households to borrow at lower interest rates.”
The signatories include former Fed chairs Janet Yellen, Ben Bernanke, and Alan Greenspan, along with ex-Treasury secretaries Henry Paulson, Lawrence Summers, Robert Rubin, Timothy Geithner, and Jacob Lew. Their participation highlights the extraordinary nature of Trump’s bid, the first in the Fed’s 112-year history to oust a sitting governor.
Trump moved to dismiss Cook last month, citing allegations of mortgage fraud. Cook has denied the claims, and records have surfaced that appear to weaken the case against her. She has since sued to remain in her post, winning two lower court rulings that kept her in office while the legal fight plays out.
Federal Reserve governors, unlike cabinet officials, can only be removed “for cause,” which historically has meant misconduct or neglect of duty. At stake is whether the disputed fraud accusations meet that threshold. Governors vote on interest rate decisions and oversee key banking regulations.
Bernanke and his peers emphasized in their brief that the Fed’s credibility relies heavily on being insulated from political interference. They argued that inflation expectations, the decisions made by “price-setters,” as they described businesses and workers, hinge on whether the Fed is seen as committed to its 2% inflation target.
If political pressure dictates monetary policy, they warned, businesses and households would lose faith in the Fed’s anti-inflation stance, triggering higher prices, lower wages, and economic instability.
“Central bank independence is the solution that Congress and the President have chosen, effectively tying their hands, like Ulysses as he passed the sirens, to protect against the risk that monetary policy will be mishandled,” the filing said.
Signers ranged from conservatives like former Sen. Phil Gramm and Hoover Institution fellow John Cochrane to Democrats including Jason Furman, Cecilia Rouse, and Jared Bernstein. Glenn Hubbard, Gregory Mankiw, and Kenneth Rogoff also joined the brief.
The Trump administration has asked the Supreme Court to overturn lower court rulings, arguing the president has sufficient grounds to fire Cook given her oversight role in the financial system.
