Banking with Interest The Battle Over the Fed's Future
Oct 8, 2025
Aaron Klein, a senior fellow at the Brookings Institution and former Deputy Assistant Secretary for Economic Policy, discusses critical issues surrounding the Federal Reserve's independence. He dives into the implications of the Supreme Court's actions regarding Lisa Cook and how they could reshape monetary policy. Klein also reveals the complexities of the Genius Act on stablecoin rewards and critiques the push for increased deposit insurance, warning against its unintended consequences for consumers and the banking system.
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Supreme Court Keeps Cook In Place
- The Supreme Court paused Lisa Cook's removal and let her remain on the Fed while litigation proceeds.
- This temporary protection complicates the administration's ability to immediately reshape the board.
Humphreys' Precedent Under Strain
- Humphreys' Executor established long-standing protection for independent agencies against presidential removal.
- Recent cases and footnotes suggest the Court is chipping away at that precedent and may carve out the Fed.
A Fragile Fed Carve-Out Likely
- The Court may try to create a Fed-specific exception, but that logic is fragile and inconsistent.
- Any carve-out will face challenges applying across other agencies and lower courts.
