WASHINGTON: A coalition of former United States Treasury secretaries, central bank chiefs, and other economic leaders has urged the Supreme Court to block President Donald Trump’s immediate removal of a key Federal Reserve official.
The group warned in a legal brief that allowing the instant ouster of Fed Governor Lisa Cook while she legally challenges it risks exposing the US central bank to political influences.
Trump announced last month that he was immediately removing Cook, who is the first Black woman to serve on the Fed’s board, over allegations of mortgage fraud.
An appeals court has already ruled that Cook can remain in her role for the time being, but Trump has since escalated his effort to fire her by taking the case to the Supreme Court.
The former officials argued that granting the administration’s push for instant removal would disrupt longstanding protections and the essential functions of the Federal Reserve.
“Doing so would expose the Federal Reserve to political influences, thereby eroding public confidence in the Fed’s independence and jeopardizing the credibility and efficacy of US monetary policy,“ they stated.
The coalition includes former Federal Reserve chairs Ben Bernanke and Alan Greenspan.
Former Treasury secretaries in the group comprise Janet Yellen, who served in President Joe Biden’s administration, and Henry Paulson, who served under President George W. Bush.
“Maintaining the status quo while the lawfulness of the termination is adjudicated, in contrast, would serve the public’s interest by safeguarding the independence and stability of the system that governs monetary policy,“ they added.
The group emphasised that Congress intentionally designed the Federal Reserve as an independent entity insulated from political pressures that might prioritise short-term gains over long-term stability.
In a separate legal filing on Thursday, Cook’s own lawyers warned that permitting her immediate removal would signal to financial markets that the Fed has lost its traditional independence.
They cautioned that such a signal risks creating chaos and disruption in the economy. – AFP