Nearly 600 economists have declared allegiance to Federal Reserve Governor Lisa Cook. They all signed an open letter on Tuesday, warning that President Donald Trump’s attempt to fire Cook threatens the central bank’s independence and erodes trust in a key pillar of the US financial system.
The letter, addressed to Trump, members of Congress, and the American public, reads, “Good economic policy requires credible monetary institutions. Credible monetary institutions, in turn, require the independence of the Federal Reserve […] We stand with Governor Cook and with the institutional safeguards that have long underpinned American economic strength.”
Nobel Prize winners Joseph Stiglitz, Claudia Goldin, Alvin Roth, Paul Milgrom, and Paul Romer are among the 593 signatories. In addition, there are several former Federal Reserve economists among them.
The letter was also signed by Christina Romer and Jared Bernstein, who were in charge of the US Council of Economic Advisers when Barack Obama and Joe Biden were presidents.
The White House replies that Trump has acted lawfully
The appeal was published just over a week after Trump attempted to remove a member of the Fed’s Board of Governors. On August 25, Trump made public a letter to Cook saying she had been fired because an official in the administration said she had committed “mortgage fraud.”
The letter from Trump to Cook said that the accusations and the quick criminal investigation into them by his Department of Justice were the reason for Cook’s firing.
However, the experts who wrote the open letter on Tuesday disagreed. They said that the Federal Reserve Act, which Congress passed in 1913, meant for the Fed to be separate from everyday politics. Also in the letter, it says that Trump and his staff’s attacks on Cook are based on “unproven accusations.”
In response to the letter, White House spokesman Kush Desai said, “The President acted within his lawful authority by removing Cook for cause, and this action augments the Federal Reserve’s credibility and accountability for both the markets and the American people.”
For months, Trump has been publicly pressing members of the Federal Reserve board to lower interest rates on loans, saying that they are stopping the growth of the US economy. The Fed is expected to vote in September to lower its goal interest rate by a quarter of a percent. However, Trump and his supporters want bigger changes.
According to the law, the president cannot remove a governor by law except “for cause.” That is a legal term that means he would have to show that the person had done something wrong.
As reported earlier by Cryptopolitan, before he accused Cook of fraud and tried to fire her because of it, Trump made similar claims against Jerome Powell, the chairman of the Federal Reserve.
The dollar rebounds on the hope of cut rates
US Treasury yields went up as the bond market shook up, which helped the dollar. The dollar went up 0.58% to 98.21 against a group of important currencies. According to the money markets, there is a 91% chance that the US Federal Reserve will cut rates by 25 basis points this month.
CME FedWatch tool currently assigns a 91.8% probability of a 25-basis-point cut. pic.twitter.com/EdwaJuipDQ
— Connor Bates (@ConnorJBates_) September 2, 2025
Also, Sterling and the Japanese yen slumped on Tuesday on growing investor anxiety about government finances. This has allowed the dollar to gain some ground.
However, this week’s US economic data could put those odds to the test. Now, investors were watching the jobs report to see what direction benchmark interest rates would take.
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