FORMER OFFICIALS BACK COOK
A group of 18 former senior US officials on Thursday also urged the Supreme Court to reject Trump’s petition. The group included the past three Fed chairs, Janet Yellen, Ben Bernanke and Alan Greenspan, as well as former Treasury secretaries Henry Paulson, Lawrence Summers, Jacob Lew, Timothy Geithner and Robert Rubin.
They argued that allowing Trump to remove Cook during her legal challenge would threaten the Fed’s independence and erode public confidence in the central bank.
In Thursday’s filing, Cook’s lawyers stressed the Fed’s “unique history of independence” had helped make the US economy the strongest in the world. They warned that siding with Trump “would signal to the financial markets that the Federal Reserve no longer enjoys its traditional independence, risking chaos and disruption.”
JUSTICE DEPARTMENT ARGUMENT
The Justice Department countered last week that the case represented “improper judicial interference with the President’s removal authority.”
Under the 1913 law, Fed governors may be removed only “for cause,” but the statute does not define the term or establish procedures for removal. No president has ever removed a Fed governor, and the law has never been tested in court.
Trump has demanded steep interest rate cuts this year and has repeatedly berated Fed Chair Jerome Powell, calling him “incompetent” and a “stubborn moron.”
He announced on Aug 25 that he was removing Cook, citing the mortgage allegations. The judge blocking her removal found the law only allows removal for misconduct committed while in office, not for actions prior to Senate confirmation in 2022.
