Lisa Cook, a Federal Reserve Governor, has garnered unprecedented support from every living former chair of the Federal Reserve’s Board in her ongoing legal fight against President Donald Trump. Cook’s nomination was sworn in during a Senate Banking nomination hearing on June 21, 2023, in Washington, D.C. Now, Trump is attempting to force her out with baseless accusations of mortgage fraud.
A detailed 32-page applicant document spells out why Cook should get the nod. It reminds us that the Federal Reserve’s policy decisions should be politically neutral. This principle is the bedrock of our U.S. prosperity and security. The brief has received endorsements from notable Republicans, including former Treasury Secretary Henry Paulson and former Council of Economic Advisers Chair Glenn Hubbard.
Trump made additional disturbing allegations against Cook, but as of this writing he has not filed those claims in court. To date, the administration has failed to present any hard evidence to support its assertions. Despite this, Cook’s legal battle has not hindered her role at the Fed. An appeals court granted her a preliminary injunction, allowing her to remain in her position while she challenges Trump’s attempt to fire her. The administration has since appealed this decision, and the appeal is now under consideration by the Supreme Court.
During a recent central bank rate-setting meeting, Cook engaged in discussions about the economy alongside Stephen Miran, an unpaid appointee and top economic adviser to Trump. Miran’s involvement continues to underscore what could be a very interesting dynamic within the Fed as Trump tries to remake its leadership.
Our brief supporting Cook also explains why it’s crucial to protect the independence of the Fed. It states, “The Fed’s ability to fight inflation is directly related not only to its actual insulation from short-term political pressures but to the public’s perception of its independence—because if the public and financial markets believe that the Federal Reserve is sufficiently insulated, they will act in accordance with that expectation, resulting in lower and more stable inflation, which is consistent with lower long-term interest rates” – [according to the brief].
This legal confrontation reflects a broader struggle over the direction and independence of the Federal Reserve, which plays a critical role in managing U.S. economic policy. The coalition of former Fed chairs, including Alan Greenspan, Ben Bernanke, and Janet Yellen, expressed concerns that Trump’s actions could “threaten” the institution’s credibility and effectiveness.