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Every living former Federal Reserve chief on Thursday urged the Supreme Court to deny Donald Trump’s bid to remove Lisa Cook from office while the central banker fights the president’s move to fire her.
Ex-Fed chairs including Janet Yellen, Ben Bernanke and Alan Greenspan, as well as top economic officials from Republican and Democratic administrations, filed a brief in the US’s top court warning justices of grave risks to the central bank’s independence if the Fed governor is removed while her legal case is being heard.
“Allowing the government to remove a member of the [Fed] 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 filing said.
The filing comes after the Financial Times reported earlier this week on growing fears that if Cook is removed even temporarily, Trump will seek to sack other top Fed policymakers in quick succession.
The so-called amicus brief was filed by a broad range of officials, spanning former Fed chairs, Treasury secretaries and Council of Economic Advisers chairs under Republican and Democratic presidents.
The brief said that if the Supreme Court granted the government’s request to remove Cook from her post immediately, it would “expose the Federal Reserve to political influences, thereby eroding public confidence in the Fed’s independence and jeopardising the credibility and efficacy of US monetary policy”.
The filing also presented a strong case for why quashing Fed independence would have grave consequences for the US economy and undermine the intention of Congress to keep the US central bank free from presidential influence.
The Supreme Court signalled earlier this year that the Fed has exceptional reasons for retaining its independence. But legal scholars and economists view the rationale set out in the judges’ opinion as far from watertight.
“It is important for the Court to have context for the meaning of and value of independence for the Fed,” said Glenn Hubbard, a former chair of the Council of Economic Advisers under George W Bush, who was one of the brief’s signatories.
Cook came under fire from the Trump administration in August, following allegations by the federal housing agency that she had committed mortgage fraud. She has denied those allegations.
The US president said late that month he was firing the Fed governor, in a dramatic escalation of attacks levelled at the central bank this year.
Cook subsequently filed a lawsuit challenging the government’s attempts to fire her. A federal judge stopped Trump from removing her while the case is being heard, a decision that was later upheld by an appeals court. The Trump administration has asked the Supreme Court to overturn those judgments.
In a sign of support from both sides of the political aisle, Hank Paulson, the former Goldman Sachs chief executive who became George W Bush’s Treasury secretary, was joined in the brief by peers Lawrence Summers and Robert Rubin, who served under Bill Clinton, and Tim Geithner, who served in Barack Obama’s administration.
The brief was also signed by former IMF chief economist Kenneth Rogoff, as well as former Council of Economic Advisers chairs Greg Mankiw, Jason Furman, Christina Romer, Cecilia Rouse and Hubbard.
Trump has repeatedly criticised Fed chair Jay Powell for not cutting interest rates sooner this year, calling him a “moron” for not yielding to his calls for drastically lower borrowing costs.
The central bank last week cut rates for the first time this year, and many Fed officials expect further reductions in the month ahead.
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