A coalition of former Federal Reserve chairs — Alan Greenspan, Ben Bernanke, and Janet Yellen — joined other top economic officials on Thursday in urging the Supreme Court to protect the central bank’s independence and prevent the removal of Fed Governor Lisa Cook while her lawsuit is still pending.
The appeal came as justices weigh an emergency request from the Trump administration seeking Cook’s dismissal, despite her legal challenge to President Donald Trump’s decision to fire her. On August 25, Trump announced he was removing Cook, accusing her of “deceitful and potentially criminal conduct in a financial matter” tied to alleged mortgage fraud, and said he no longer had confidence in her integrity.
The case has ignited a larger debate over presidential power and the Federal Reserve’s independence under the Trump administration.
The Warning from Former Officials
In their filing, the former chairs and officials cautioned that removing Cook immediately “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.”
They argued that keeping Cook in place while the courts review the legality of her termination “would serve the public’s interest by safeguarding the independence and stability of the system that governs monetary policy in this country.”
The independence of the Federal Reserve, they wrote, is essential to maintaining trust that the U.S. will keep inflation under control and preserve conditions for moderate borrowing costs across households, businesses, and government.
“Allowing the government to remove a member of the Board of Governors for the first time in the Nation’s history, while under the cloud of legal challenge, will erode public confidence in the Fed’s independence and threaten the long-term stability of our economy,” the officials added.
Legal Perspectives
Michael McAuliffe, a former federal prosecutor and state attorney, told Newsweek that the Court’s interim rulings suggest its precedent limiting presidential control over independent agencies “is at grave risk.” If that precedent falls, many independent agencies could lose protections that have historically shielded them from political interference.
Still, McAuliffe noted that the Federal Reserve might be treated differently given its unique “part-public, part-private” structure and its historical role in maintaining independent monetary policy.
Barbara McQuade, another former federal prosecutor, said Trump lacks authority to fire Cook and that disputed claims of mortgage fraud “do not seem to amount to cause.” She warned that dismantling protections for career professionals could drive away talent and erode institutional knowledge, undermining government effectiveness.
Some justices appear open to the “unitary executive theory,” McQuade added, but they may view the Fed differently due to its quasi-private design and long-standing separation from partisan politics.
Why Trump Says He Fired Cook
The Trump administration argues that Cook improperly listed two homes as “primary residences” in 2021, potentially securing lower mortgage rates and reduced down payments. Cook has denied wrongdoing, and Reuters has reported that newly surfaced documents undermine those allegations.
In his termination letter, Trump wrote: “At a minimum, the conduct at issue exhibits the sort of gross negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator.”
An appeals court has already upheld a lower court ruling blocking Trump from firing Cook, but the administration has appealed to the Supreme Court.
Broader Implications
Former Fed vice chair Alan Blinder told CNN that Trump’s move threatens to politicize the central bank: “The Federal Reserve is designed to be independent of politics, for very good reasons. He is trying to end that and make it an arm of the Trump administration, which will be very bad for monetary policy if it happens.”
The case could hinge on how the Supreme Court interprets the meaning of “for cause” — the legal standard for firing a Fed governor. McAuliffe suggested the Court might rule narrowly on that definition rather than issue a sweeping decision on Fed independence.
What’s Next
The Supreme Court has not yet indicated how it will rule. But its decision will carry significant consequences for the balance of presidential power, the future of independent agencies, and the credibility of U.S. monetary policy.
