Former Fed chairs and Treasury secretaries warned against political interference in the central bank
A bipartisan coalition of the United States’ most influential former economic policymakers cautioned the Supreme Court that allowing President Donald Trump to immediately remove Federal Reserve Governor Lisa Cook would undermine the central bank’s independence and threaten public trust in monetary policy.
In a friend-of-the-court brief filed Thursday, the group—including former Fed chairs Alan Greenspan and Ben Bernanke, and former Treasury secretaries Janet Yellen, Timothy Geithner, and Henry Paulson—urged the justices to keep Cook in her post while litigation over her removal continues.
Allowing the president to remove Cook "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," the brief said.
The warning comes as the Trump administration seeks to oust Cook over unproven allegations of mortgage fraud in loan documents she signed before joining the Fed in 2022. Cook has denied the allegations and has not been charged with a crime.
The administration’s legal team has argued that the law allows the president to fire Fed governors for cause, but a lower court blocked the move, prompting an appeal to the Supreme Court.
Broader implications for central bank independence
The case has drawn intense scrutiny from the financial sector, with many industry leaders viewing it as a test of the Fed’s autonomy, especially after the recent appointment of Stephen Miran, a Trump economic adviser, to the board.
During a closely watched Senate Banking Committee hearing, Miran pledged to uphold the central bank’s independence. However, he added, “the president is entitled to a view on appropriate monetary policy, as is everyone else interested in the subject.”
"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 in this country,” the brief stated.
Legal experts say the case could set a precedent for the president’s authority to remove members of independent agencies. The core issue of Fed independence is whether the central bank can operate without direct control from the president, no matter who is in office.
“If you want an independent Fed, then you want the Fed governors to have certain kinds of legal protections against pressure from the president,” Kenneth Katkin, law professor at Northern Kentucky University’s Chase College of Law, told Mortgage Professional America.
“That's been the understanding for as long as we've had the Fed, but Trump is fundamentally challenging that. If the Supreme Court rules in favor of Trump, then they will be saying that the concept of Fed independence is over, that we won't have that anymore.
The Supreme Court’s conservative majority has previously allowed the Trump administration to remove leaders of other independent agencies during ongoing litigation. However, the Fed’s unique role in the economy may warrant special consideration, as signaled by justices in recent cases.
Mortgage sector watches closely
The mortgage industry, already navigating a volatile interest rate environment, is closely monitoring the outcome.
The Federal Reserve’s recent decision to cut rates for the first time since December was made with Cook present, underscoring the practical stakes of the legal battle.
Sam Williamson, a senior economist at First American, told Mortgage Professional America that if markets think decisions are political, it could actually push mortgage rates in the wrong direction.
“Rate decisions require consensus among the full Federal Open Market Committee, which acts as a guardrail against abrupt shifts,” Williamson said.
“The greater risk lies in perception. If markets view aggressive cuts as politically motivated, rather than data-driven, inflation expectations could rise, pushing long-term yields—and mortgage rates—higher, despite lower short-term rates.”
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