The chair of the Federal Reserve System, Lisa Cook, has backing among living former chairs of the Fed in her legal fight with President Donald Trump, who sought to remove her last month over unproven allegations of mortgage fraud, according to an amicus brief filed with the Supreme Court on Thursday.

Earlier this month, the appellate court kept Cook in office under a previous temporary restraining order, as her suit challenging the dismissal continued to be considered – just days before the Fed’s next meeting. The administration appealed, and the case is now before the nation’s highest court.

In response to the appeal, Cook said that her removal would be “a mortal blow” to the Fed’s independence, urging the Supreme Court to reject the administration’s extraordinary request for her removal while the case is winding through the lower courts.

The Fed’s ability to fight inflation is not only tied to its actual insulated stance from short-term political pressures, but also to the public’s perception of its independence – because if the public and financial markets believed that the Fed was sufficiently insulated, they would act in accordance with those expectations, which would lead to lower and more stable inflation and correspondingly lower long-term interest rates.

– From amicus brief materials

Implications for Monetary Policy Independence

The 32-page document underscores the historical importance of decisions by the Fed regarding monetary policy staying out of political influence, since that is the agency’s core role in maintaining the stability of the American economy. According to the amicus brief, investor and global-market reputation hinges on this.

A deterioration of trust in the Fed could affect one of its main missions – curbing inflation, the document states.

The Fed’s ability to fight inflation is not only tied to its actual insulated state from short-term political pressures, but also to the public’s perception of its independence – because if the public and financial markets believed that the Fed was sufficiently insulated, they would act in accordance with these expectations, leading to lower and more stable inflation and correspondingly lower long-term interest rates.

– Cook’s lawyers

If Trump succeeds in removing Cook, it would be the first time in the Fed’s long history that a president has ousted a governor in the institution’s 111-year existence.

Cook’s legal fight is part of Trump’s broader strategy to reshuffle the upper echelons of the Fed.

At the previous Fed meeting on rate decisions this month, Cook discussed the economy with the Fed’s newest governor Steven Miran, who is Trump’s top economic adviser and is taking an unpaid leave of absence to fill the vacant term on the Fed’s Board of Governors. Miran was sworn in an hour before the Fed meeting.

In sum, this case underscores how closely political differences and monetary policy are linked, and how the prospect of leadership changes at the Fed could influence trust in the central bank and the long-term stability of financial markets.