In a significant move that underscores the importance of Federal Reserve independence, every living former chair of the Federal Reserve, alongside numerous ex-Treasury secretaries and former White House economic advisors, submitted a legal brief to the Supreme Court on Thursday. This brief aims to prevent President Donald Trump from dismissing Fed Governor Lisa Cook while her lawsuit challenging her removal is ongoing.
The signatories of the brief emphasized that the independence of the Federal Reserve, as defined by the limited authority granted to it by Congress, is crucial for maintaining the stability of the national monetary system. According to the amicus brief, allowing the removal of Governor Lisa D. Cook while her legal challenge is pending would pose a direct threat to this independence and could significantly erode public confidence in the Federal Reserve.
The legal brief boasts a remarkable lineup of signers, including former Federal Reserve chairs such as Alan Greenspan, Ben Bernanke, and Janet Yellen. Additionally, it features former Treasury secretaries like Robert Rubin, Larry Summers, Hank Paulson, Jack Lew, and Timothy Geithner. The brief also includes former chairs of the White House Council of Economic Advisers, such as Glenn Hubbard, Greg Mankiw, Christina Romer, Cecilia Rouse, Jared Bernstein, and Jason Furman, as well as former Fed Governor Dan Tarullo.
Notably, the group comprises members who served under both Democratic and Republican administrations. Economists such as Ken Rogoff, Phil Gramm, and John Cochrane also lent their support to the brief, with Gramm having previously chaired the Senate Banking Committee.
The brief articulates that allowing Cook's removal at this juncture would subject the Federal Reserve to undue political pressures, thereby undermining public trust in the Fed's independence. This erosion of confidence could jeopardize the credibility and effectiveness of U.S. monetary policy.
This legal filing coincides with a critical deadline for Cook's attorneys, who must respond by 4 p.m. ET on Thursday to the Justice Department's arguments advocating for Trump's authority to remove her from the seven-member Fed Board of Governors. This situation arises as the Supreme Court deliberates on whether the president possesses the legal grounds to dismiss Cook.
On August 25, Trump declared his intention to fire Cook, citing allegations of mortgage fraud linked to applications she submitted for two residential properties she owns. Cook, however, has denied any wrongdoing. In response, Cook initiated a lawsuit in the U.S. District Court in Washington, D.C., seeking a judicial order to block her removal.
On September 9, a judge issued an order preventing Trump from dismissing Cook while her case is underway. A subsequent split decision by a three-judge panel on the federal appeals court in D.C. upheld this ruling. In response, Trump has requested that the Supreme Court overturn these lower court decisions to permit his removal of Cook.
