In an Open Letter, now with 593 signatories expressing their solidarity, economists emphasize that “sound economic policy requires credible monetary institutions,” signifying the need for an “independent Federal Reserve.”
Nobel laureates Claudia Goldin, Paul Milgrom, Paul Romer, and Joseph Stiglitz, among the signatories, argue that “recent statements against Governor Cook, including threats of dismissal and claims of her termination, were made based on unproven accusations.”
They warn this approach “threatens the fundamental principle of central bank independence and undermines confidence in one of the most important U.S. institutions.”
The document is addressed to the White House and members of Congress.
Lisa Cook has been under pressure from the White House for two weeks. Trump has already sent her a letter informing her that she was “terminated with immediate effect.”
Cook, appointed to the Fed by Joe Biden, quickly announced her intention to appeal to the courts, asserting that Trump lacks the authority to force her out and is acting unconstitutionally.
Her potential departure would allow Trump to appoint a loyalist amid his advocacy for lowering the central bank’s benchmark interest rate.
Thus far, Trump’s attacks, including insults, have focused on Fed Chair Jerome Powell, whom he appointed during his first term.
Through these attacks, Trump aimed for Powell’s resignation, an objective he has temporarily abandoned given the unease it caused in financial markets, which rely on the central bank to combat inflation.
