Bipartisan group urges Supreme Court to reject Trump bid to fire Fed governor Lisa Cook

A bipartisan group of former Federal Reserve chairs, Treasury secretaries, and White House economists on Thursday urged the Supreme Court to reject President Donald Trump's bid to remove Federal Reserve Governor Lisa Cook.

The filing argues that allowing the removal would undermine the Fed's long-standing independence from day-to-day politics and could contribute to higher inflation and a weaker economy. The brief contends that removing Cook would set a dangerous precedent for monetary policy independence at a time when confidence in the central bank's commitment to low inflation is viewed as essential for economic stability.

The filing was signed by 18 economists from both political parties, including former Fed chairs Janet Yellen, Ben Bernanke, and Alan Greenspan, and former Treasury Secretaries Henry Paulson, Lawrence Summers, Robert Rubin, Timothy Geithner, and Jacob Lew. The list of signatories also includes Phil Gramm, Jason Furman, Glenn Hubbard, Gregory Mankiw, Kenneth Rogoff, Cecilia Rouse, John Cochrane, and Jared Bernstein, among others. The cross-partisan collection of names underscores the breadth of concern within economic circles about the implications of politically driven moves against a Fed governor. Cook herself has denied the mortgage-fraud allegations that sparked the bid, and two federal courts have ruled she can stay in her post while the case proceeds.

The administration has framed Cook's removal as a matter of “for cause” under the Fed’s independent structure, but Fed governors are not part of the president's cabinet and historically can only be removed for malfeasance or neglect in office. The legal fight centers on whether the mortgage-fraud allegations constitute sufficient cause to remove a sitting governor, a question that the courts have yet to resolve and that the Supreme Court has agreed to hear after an appeals court allowed Cook to remain pending further review.

In their brief, the former officials argued that Fed independence is critical to effective inflation control. They cited decades of macroeconomic research indicating that a more independent central bank tends to deliver lower and more stable inflation without increasing unemployment. They also warned that independence helps anchor the value of the dollar and reduces borrowing costs for households and businesses over time.

“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 brief said. “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 brief also emphasized that credibility matters for price-setting behavior. “If the Federal Reserve announces its commitment to a policy of low inflation and the price-setters believe that the commitment is real, then price-setters will choose lower prices (and lower wages) consistent with that belief,” it stated, contrasting a politicized approach with a steadfast, rules-based framework. The authors warned that yielding to political pressure could lead price-setters to expect higher inflation and adjust their behavior accordingly, potentially triggering a cycle of higher inflation and weaker employment.

The filing was signed by former officials from both parties, including Republican senator-turned-analyst Phil Gramm and Obama-era adviser Jason Furman, as well as Bush administration economists Glenn Hubbard and Gregory Mankiw, IMF former chief economist Kenneth Rogoff, and Biden adviser Cecilia Rouse. John Cochrane, a frequent Fed critic and Hoover Institution fellow, also signed, along with Jared Bernstein, a Biden adviser.

The Trump administration appealed to the Supreme Court after an appeals court upheld an earlier ruling allowing Cook to keep her job while the case proceeds. The administration argues that the mortgage-fraud allegations provide sufficient cause to remove a governor who oversees financial-system regulation and monetary policy. The dispute centers on whether the allegations meet the standard for removal “for cause,” given the Fed's insulated, independent status and the long-standing principle that the central bank should operate free from day-to-day political pressure.

The case, which reflects a broader debate over executive power versus the Fed's independence, could have wide-reaching implications for how monetary policy is conducted and how insulated policymakers remain from political cycles. Supporters and critics alike will be watching how the Supreme Court weighs the balance between accountability and independence, a centerpiece of the U.S. political and economic landscape.