Alan Greenspan, Ben Bernanke, Janet Yellen and other former top economic officials appointed by presidents of both parties urged the Supreme Court on Thursday to preserve the Federal Reserve’s political independence and allow Lisa Cook to remain as a central bank governor for now.
The justices are weighing an emergency appeal from the administration to remove Cook while her lawsuit challenging her firing by Republican President Donald Trump proceeds through the courts.
The White House campaign to unseat Cook marks an unprecedented bid to reshape the Fed board, which was designed to be largely independent from day-to-day politics. No president has fired a sitting Fed governor in the agency’s 112-year history.
Earlier in September, a judge determined that Trump’s move to fire Cook probably was illegal. An appeals court rejected an emergency plea to oust Cook before the Fed’s meeting last week when Cook joined in a vote to cut a key interest rate by one-quarter of a percentage point.
A day after that meeting, the administration turned to the Supreme Court and again asked for her prompt removal.
In their filing, lawyers for the former economic officials wrote that immediately ousting Cook “would expose the Federal Reserve to political influences, thereby eroding public confidence in the Fed’s independence and jeopardizing the credibility and efficacy of U.S. monetary policy.”
Greenspan, Bernanke and Yellen served as successive chairs of the Fed’s seven-member board of governors, spanning six presidential administrations back to 1987. Greenspan and Bernanke were initially appointed by Republican Presidents Ronald Reagan and George W. Bush, respectively. President Barack Obama, a Democrat, nominated Yellen to the Fed and she was Democratic President Joe Biden’s treasury secretary.
Trump sought to fire Cook on Aug. 25, but a judge ruled that she could remain in her job. Trump has accused Cook of mortgage fraud because she appeared to claim two properties, in Michigan and Georgia, as “primary residences” in June and July 2021, before she joined the board. Such claims can lead to a lower mortgage rate and a smaller down payment than if one of them was declared as a rental property or second home.
