The independence of the Federal Reserve is top of mind following President Donald Trump’s push to fire Fed Governor Lisa Cook. The Supreme Court has been called upon to decide whether or not Cook will be able to stay in her role.
“What the Supreme Court decides is of monumental importance right now,” Lael Brainard, Distinguished Fellow at the Psaros Center for Financial Markets and Policy, said during a conversation with Nick Timiraos (C’06), Chief Economics Correspondent of The Wall Street Journal. And the Court could go either way, she added.
What could the impact be on other Fed governors?
Brainard, former Fed vice chair, says that it could discourage governors to speak publicly about the economy — something that could in turn be worrisome to investors.
The president has also been vocal about wanting interest tastes to come down in order to lower interest payments on the national debt. When it comes to debt management, should the Fed and Treasury work more closely?
“Its very difficult to have a central bank subordinate to a fiscal authority in terms of managing interest payments on the national debt,” Brainard said.