Former Fed Chairs and Treasury Secretaries Tell Supreme Court: Don’t Let Trump Fire Lisa Cook

Lisa Cook. (Anna Rose Layden/Bloomberg)

Key Points

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• Former Federal Reserve chairs and Treasury Secretaries urged the Supreme Court to prevent President Donald Trump from firing Fed governor Lisa Cook.
• Officials say that removing Cook would expose the Federal Reserve to political influences, eroding public confidence and jeopardizing monetary policy.
• Trump dismissed Cook in August over alleged mortgage misstatements, but lower courts reinstated her, citing a denial of due process.

Every living former chair of the Federal Reserve, along with a bipartisan group of former Treasury secretaries, urged the Supreme Court on Thursday to block President Donald Trump from firing Fed Gov. Lisa Cook.

In their legal brief, the officials said that allowing Cook’s removal 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.”

Trump dismissed Cook in August, accusing her of misstatements on mortgage documents predating her tenure at the Fed. A lower court quickly reinstated her, ruling she had been denied due process, before an appeals court upheld the decision. The White House is now asking Supreme Court justices for an emergency order that would allow for Cook’s removal while litigation proceeds.

“The Fed’s ability to fight inflation is directly related not only to its actual insulation from short-term political pressures but also to the public’s perception of its independence,” the former Fed chairs argued. “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.”

The roster of signatories on Thursday’s friend-of-court briefing includes former Fed chairs Alan Greenspan, Ben Bernanke, and Janet Yellen, plus former Treasury secretaries Robert Rubin, Larry Summers, Hank Paulson, Jack Lew, and Tim Geithner.

Cook’s legal team also fired back against Trump’s request for a Supreme Court stay on Thursday. “The President’s stay application asks this Court to act on an emergency basis to eviscerate the independence of the Federal Reserve Board,” her lawyers wrote in a new filing.

“The bottom line is this,” her lawyers wrote. “Contrary to the president’s boundless assertion of authority, there must be some meaningful check on the president’s ability to remove Governor Cook.”

“Otherwise, any president could remove any governor based on any charge of wrongdoing, however flawed,” they argued. “That regime is not what Congress envisioned when it protected the Federal Reserve Board from presidential control.”

Cook launched her legal battle on Aug. 28 after she was terminated by Trump. Federal Housing Finance Agency Director Bill Pulte alleged that Cook had made false claims on mortgage documents in 2021 that may have secured her more-favorable loan terms, and Trump cited that alleged mortgage fraud as cause for dismissal in an Aug. 25 letter. Cook denies any wrongdoing.

A district court reinstated Cook and ruled that her removal likely violated her right to due process, which the Trump administration appealed. In an order earlier this month, an appeals court found in a 2-1 decision that the lower court’s ruling was correct.

In denying the government’s bid to stay the district court’s ruling, Circuit Judges Bradley N. Garcia and J. Michelle Childs noted that Cook has been serving in her position continuously, and so granting the government’s request for emergency relief would “upend, not preserve,” the status quo.

The policymaker participated in last week’s Federal Open Market Committee meeting and is currently serving on the board of governors.

The government immediately appealed the decision, arguing that Trump’s move to oust a Fed governor for cause falls within the president’s discretion, and shouldn’t be second-guessed by the courts. It claimed Trump had clear cause to oust Cook, pointing to the alleged misrepresentations on mortgage documents predating her time in office.

When that was denied, Trump took his fight to fire Cook to the Supreme Court. In response, Cook’s team argued that removing her from the central bank would disrupt the economy.

The Supreme Court is expected to rule quickly. A temporary order allowing Cook’s removal would mark a break with more than a century of practice—and raise questions about whether the Fed is protected from political influence.

Write to Nicole Goodkind at nicole.goodkind@barrons.com