Fed Governor Lisa Cook Sues Trump Over Removal Attempt
Federal Reserve Governor Lisa Cook has taken legal action against President Donald Trump after he moved to remove her from her post, setting up a potential court fight that could test the independence of the U.S. central bank.
Cook Pushes Back Against Trump’s Order
In her lawsuit, filed Thursday, Cook asked the court to block Trump’s order and declare it unlawful. She also named Fed Chair Jerome Powell as a defendant in the case.
Trump argued that Cook misrepresented details on a mortgage application and insisted the Constitution gives him the authority to dismiss her. Cook rejected that claim, saying there is no legal justification for her removal.
Why the Case Matters
Cook is one of seven governors on the Federal Reserve Board and sits on the committee that sets interest rates. Her attorney, Abbe Lowell, said Trump’s move is both “unprecedented and illegal,” warning that if it stands, it would be the first forced removal of its kind in the Fed’s history.
“The Federal Reserve Act requires a legitimate cause for dismissal,” Lowell said, “and an unproven allegation about private mortgage paperwork doesn’t qualify.”
White House Defends Trump’s Decision
The White House pushed back, with spokesperson Kush Desai saying the president had the right to act.
“The President determined there was cause to remove a governor who was credibly accused of lying on financial documents while serving in a sensitive role overseeing U.S. financial institutions,” Desai said. “This improves accountability at the Federal Reserve.”
The Allegations Against Cook
The claims against Cook were first raised in a letter from housing finance regulator Bill Pulte, a Trump ally. He accused her of filing conflicting documents for two separate homes, each listed as her primary residence.
Cook has not been charged, and it is unclear whether any investigation is underway. Her lawsuit does not address the accusations directly.
Political and Economic Stakes
The Federal Reserve Act limits the president’s ability to fire governors, allowing it only “for cause.” Legal experts have questioned whether Trump’s reasoning meets that standard.
Cook has consistently voted with Chair Powell and other board members to hold interest rates steady. Trump has been pressing the Fed to cut rates more sharply and could use her removal to replace her with someone more aligned with his policies.
Because the Fed’s decisions affect borrowing costs, mortgage rates, and even global markets, the case could have wide-ranging implications for U.S. economic stability and the Fed’s credibility.