Jan 21 (Reuters) – President Donald Trump’s contested firing of Federal Reserve Governor Lisa Cook has become a test case in his bid to assert control over the U.S. central bank and his ongoing efforts to push the limits of presidential power.
As the first sitting Fed policymaker to be the target of an attempted presidential ouster, Cook is no stranger either to being first, or to being targeted.
The daughter of a nursing professor and hospital chaplain, Cook was among the initial Black students to desegregate the schools that she and her sisters attended in rural Milledgeville, Georgia. She has told interviewers she still has scars above her right eye and on her leg from beatings during that time.
After studying philosophy at Spelman College, Cook became the first graduate of that historically Black women’s institution in Atlanta, Georgia, to win a Marshall Scholarship, which funded a year’s study at Oxford University.
Later, as she has recounted in many speeches, a British economist whose name she no longer recalls convinced her during a hiking trip up a Tanzanian mountain that she should become an economist. No record exists to verify whether she is the first to be converted by Kilimanjaro to the discipline of economics.
Cook received her PhD in economics from the University of California, Berkeley, where Barry Eichengreen – who has written extensively about what is at stake when political leaders drive a central bank’s policy decisions – was one of her dissertation advisers.
“I know Lisa to be careful and ethical,” Eichengreen told fellow economist Paul Krugman in an interview last August, days after Trump said in a social media post that he was firing Cook for what he said were false statements on her mortgage application, or at the least “gross negligence” for faulty paperwork.
Cook has called the allegations baseless and sued to stop the dismissal. It is Trump’s effort to reverse a lower court’s decision to block her removal that is currently under consideration by the U.S. Supreme Court. A hearing is scheduled for Wednesday.
“She’s also one of the strongest people I know,” Eichengreen told Krugman. “This is not someone that we should be making predictions about, but I think we have a very strong individual on the other side of this controversy.”
FOCUS ON IMPACT OF ARTIFICIAL INTELLIGENCE WHILE AT FED
Cook taught at Harvard University and was a research fellow at Stanford University’s Hoover Institution before she was hired as an economics professor at Michigan State University in 2005. She wrote extensively about racial disparities, documenting the negative impact of anti-Black violence and gender inequality on innovation and economic growth.
She was an adviser on the transition teams for the Obama-Biden and Biden-Harris administrations, and a senior economist for the White House’s Council of Economic Advisers from 2011 to 2012.
Nominated in 2022 to the Fed’s Board of Governors by then-President Joe Biden, Cook’s Senate confirmation was a drawn-out and contentious process that included her being subjected to what she called “anonymous and untrue attacks” on her work and accusations from Republican lawmakers that she would be soft on inflation.
She became the first Black female U.S. central banker only after Vice President Kamala Harris cast a tie-breaking 51st vote in an evenly divided U.S. Senate.
Cook voted with her Fed colleagues to raise interest rates in 2022 and 2023 to fight a surge in inflation, but supported the central bank’s three rate cuts last year to protect against a softening labor market. Trump has excoriated the Fed for not delivering the big rate cuts he seeks.
As a Fed policymaker, Cook has focused many of her public remarks on the impact of artificial intelligence, which the Trump administration sees as key to economic prosperity.
She argues that AI could boost productivity and ease inflation, though the timing of those changes is uncertain, and the benefits could be unevenly distributed across the nation’s workforce.
(Reporting by Ann Saphir; Editing by Paul Simao)
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