Hundreds of economists sign open letter backing embattled Fed Governor Lisa Cook after Trump attacks
More than 450 economists, including several Nobel Prize winners, have signed a letter in support of Federal Reserve Governor Lisa Cook, whom President Donald Trump has sought to oust on unproven allegations of mortgage fraud.
The letter condemns elected officials for engaging in “rhetoric or actions that erode the Federal Reserve’s independence,” and specifically cites Trump’s recent unproven claims about Cook.
“Recent public statements about Governor Cook—including threats of removal and a claim that she has been fired—have arrived alongside unproven accusations,” the hundreds of economists said in the letter.
Trump moved to fire Cook on unproven claims that Cook committed mortgage fraud years ago by claiming two primary residences on loan applications. The allegation stems from Bill Pulte, the director of the Federal Housing Finance Agency, who has launched similar claims at notable Trump opponents.
Cook, who remains in her position, has sued Trump, claiming he is violating the law by trying to fire her because Federal Reserve governors can only be removed with “cause.”
Economists who signed the letter said Trump’s approach “threatens the fundamental principle” of the central banking system, which is supposed to remain independent from politics.
“That trust is a cornerstone of the system that has fueled America’s economic vitality over the decades. We urge all branches of government to uphold the law and the norms that protect U.S. economic stewardship,” the economists said in the letter.
Signatories include Claudia Goldin, Paul Milgrom, Paul Romer, and Joseph Stiglitz – all of whom are prominent economists and laureates of the Nobel Prize in economic sciences. Stiglitz served as the chair of the Council of Economic Advisors and Chief Economist of the World Bank.
Over the last few months, Trump has publicly taken issue with the Federal Reserve for not lowering interest rates quickly. He’s insulted Chairman Jerome Powell multiple times, seemingly an attempt to pressure Powell.
The Fed is supposed to operate independently from the White House in order to make the appropriate decisions for the economy without political influence. But Trump has seemingly sought to pack the Board of Governors with loyalists to give him more sway with the board that sets interest rates.
Trump’s attempts to fire Cook appear to be his way of obtaining another nominee to the Fed.
Cook, the first Black woman to serve as a Federal Reserve governor, was nominated and later confirmed by former president Joe Biden in 2022. Her term, like other Fed governors, is supposed to last for 14 years.
Economists who signed the open letter, addressed to the president, Congress, and the American public, reminded readers that Fed governors are supposed to serve fixed terms with a high bar for removal to prevent political influence.
“That protection is not merely a legal formality; it is a practical mechanism, designed to ensure that monetary policy cannot be misused for political gain at the expense of what’s best for the economy,” the economists wrote.
