Sou Hu Cai Jing·2025-09-25 22:02Core Viewpoint - A coalition of former U.S. Federal Reserve chairs, Treasury Secretaries, and economists urges the Supreme Court not to allow President Trump to dismiss Fed Governor Lisa Cook, warning that such an action could jeopardize the health of the U.S. economy and undermine the independence of the Federal Reserve, potentially leading to increased inflation [1][2][3]. Group 1: Concerns Over Fed Independence - The coalition argues that allowing Trump to dismiss Cook during her legal challenge would weaken public trust in the Fed and disrupt its efforts to stabilize prices, increase employment, and regulate long-term interest rates [1][2]. - Economists have reached a consensus that greater independence for central banks correlates with lower and more stable inflation without increasing unemployment, thus supporting the Fed's dual mandate of price stability and maximum employment [1][3]. Group 2: Historical Context and Warnings - The document references former Fed Chair Arthur Burns, who faced political pressure from President Nixon in the 1970s, leading to a period of high inflation and economic instability due to a lack of independence [2][3]. - The former officials emphasize that a non-independent central bank tends to pursue short-term gains, which can result in long-term economic damage [3]. Group 3: Legal Proceedings and Implications - Cook's legal team argues that Trump's request to dismiss her before the conclusion of the lawsuit would severely undermine the Fed's independence and could create chaos in financial markets [8][10]. - The Supreme Court's decision will hinge on whether Trump has "just cause" under the Federal Reserve Act to dismiss Cook, with her lawyers asserting that the allegations against her are unsubstantiated and politically motivated [9][11]. Group 4: Support from High-Profile Officials - The coalition includes prominent figures from both political parties, such as former Fed Chairs Alan Greenspan, Ben Bernanke, and Janet Yellen, as well as former Treasury Secretaries like Robert Rubin and Larry Summers [4][6]. - Alan Blinder, a former Fed Vice Chair, noted that there is a strong bipartisan consensus against undermining the Fed's independence, warning that if Trump can dismiss Cook, he could do so to any Fed official, eroding the institution's credibility [6].