A rare filing from economic heavyweights could shape how Supreme Court justices view the limits of presidential control over the Federal Reserve and U.S. monetary policy.
On Wednesday, the nation’s highest court heard oral arguments for two hours on whether President Donald Trump has the authority to remove Lisa Cook from the Federal Reserve’s Board of Governors.
That debate has drawn an extraordinary amicus brief from some of the most influential figures in U.S. economic policy. An amicus brief is a submission from a group not directly involved in a suit that offers information, expertise or arguments to help a court decide the matter.
It was signed by every living former chair of the Federal Reserve, Alan Greenspan, Ben Bernanke and Janet Yellen, as well as six former Treasury secretaries who served presidents of both parties.
The group, which also includes seven former White House economic advisers, spans roughly five decades of U.S. economic policymaking.
Such intervention is almost unheard of, as former Fed chairs and Treasury secretaries typically steer clear of public legal battles.
In the 32-page amicus brief, the group argues that allowing the Trump administration to remove a sitting Fed board member would ‘erode public confidence in the Fed’s independence and threaten the long-term stability of the economy.’
Expanding the president’s power over Fed board membership is ‘neither necessary nor appropriate’ and would be counterproductive, the group writes, because it would weaken the central bank’s independence and lead to higher inflation and economic instability.
That concern, the group argues, is already playing out in real time.
‘Sectors that pay close attention to the Federal Reserve — including the financial markets, the public, employers and lenders — are watching the current dispute over the President’s removal of Governor Cook to judge how credible the Fed will be going forward.’
John Sauer, the solicitor general, said Cook’s amici filing did not address the ‘legal issues at the heart of this case.’
‘Most of Cook’s amici emphasize policy arguments, touting the perceived benefits of the Federal Reserve Board’s independence in setting monetary policy,’ Sauer wrote, adding that ‘policy preferences are not the law, and these particular preferences lack any logical limit.’
In deciding Cook’s case, the justices could also shape Federal Reserve Chair Jerome Powell’s future at the Fed.
In a notable departure from his typically measured and low-profile approach, Powell attended the oral arguments at the Supreme Court. His appearance comes amid a criminal investigation by the U.S. Attorney’s Office in Washington, D.C., related to his congressional testimony on a multibillion-dollar renovation of the Fed’s headquarters.
Powell described the investigation as ‘unprecedented,’ calling it another instance of the Trump administration using legal threats to pressure the central bank on policy decisions.
Cook’s ascent to the Federal Reserve was historic from the start.
Now, she stands at the center of an even more consequential moment, as President Donald Trump moves to fire her — a step that would be unprecedented in the Fed’s 112-year history.
The court is expected to issue a ruling on Cook’s case by the summer.