US President Donald Trump has announced he will immediately remove Federal Reserve governor Lisa Cook from her post. The move intensifies his confrontation with the central bank.
Trump claimed there was “sufficient reason” to accuse Cook of submitting false information on mortgage paperwork. He cited constitutional authority he said gives him the power to act. Cook rejected the claim, insisting the president lacks the legal right to dismiss her. She stated she will not resign.
No US president has previously attempted to fire a Federal Reserve governor. Trump’s action follows months of criticism toward the Fed and its chair Jerome Powell. He accuses Powell of failing to cut interest rates quickly enough.
Cook’s critical role in the Fed
Cook is one of seven governors on the board and serves on the twelve-member committee that sets US interest rates.
The Fed’s decisions affect loan costs, savings rates, and global markets. Central banks worldwide closely monitor US policy when shaping their own strategies.
At the July meeting, Cook voted with Powell and most members to maintain rates. She was appointed in 2022 by President Joe Biden, becoming the first African American woman to serve as a governor.
Legal battle expected
Trump’s announcement is likely to trigger legal challenges. Experts say the White House must demonstrate valid grounds for dismissal in court.
The conflict between Trump, Cook, and Powell raises questions about the Fed’s independence. Economists warn central banks must remain free from political pressure to act in the public interest.
Cook stated that Trump attempted to fire her “for cause,” though no legal basis exists. She said: “I will not resign. I will continue to fulfill my responsibilities for the US economy, as I have since 2022.”
Her lawyer, Abbe David Lowell, vowed to challenge the move through all legal channels. The Federal Reserve has not commented publicly.
Mortgage documents at the center
Trump announced his decision Monday night on Truth Social. He accused Cook of declaring a Michigan property as her primary residence, then making the same claim for a Georgia home two weeks later.
“It is inconceivable that you were unaware of your first commitment when making the second,” Trump wrote.
Market reaction
European markets opened lower on Tuesday following the announcement. US government bond yields also rose.
The dollar briefly weakened against major currencies before recovering. Julia Lee of FTSE Russell said: “The key question is whether Trump succeeds in replacing Cook. That could reshape the Fed’s composition and affect investor confidence in the US.”
Allegations linked to Trump ally
Trump had already demanded Cook’s resignation last week. His call followed a letter from housing finance regulator Bill Pulte, a Trump ally, accusing her of mortgage fraud. He urged Attorney General Pam Bondi to investigate. It is unclear if any inquiry has started.
Cook said in a media interview she first learned of the allegations through press reports. They stem from a mortgage application she submitted four years before joining the Federal Reserve.
“I will not step down because of claims circulating online,” she said. She added she was gathering documents to respond to legitimate questions and provide the facts.
