US President Donald Trump has announced he will immediately remove Federal Reserve governor Lisa Cook. The decision intensifies his ongoing clash with the central bank.
Trump claimed Cook provided false information on mortgage documents and argued that constitutional authority allows him to dismiss her. Cook rejected the claim, insisting the president lacks legal power to fire her. She confirmed she will not resign.
No US president has previously attempted to remove a Federal Reserve governor. Trump’s action follows months of criticism toward the Fed and its chair Jerome Powell. He accuses Powell of refusing to lower interest rates quickly.
Cook’s key role in US financial policy
Cook sits on the seven-member board and participates in the twelve-member committee that sets US interest rates.
The Fed’s decisions affect borrowing costs, bank savings rates, and global markets. Central banks worldwide monitor US policy when shaping their own monetary 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 hold the position.
Legal confrontation expected
Trump’s announcement is likely to trigger legal challenges. Experts say the White House must demonstrate in court that valid grounds exist for her dismissal.
The dispute between Trump, Cook, and Powell raises questions about the Fed’s independence. Economists argue central banks must remain free from political influence to serve the public interest.
Cook said Trump attempted to fire her “for cause,” though no legal basis exists. She stated: “I will not resign. I will continue fulfilling my responsibilities for the US economy, as I have since 2022.”
Her lawyer, Abbe David Lowell, pledged to fight the move through all legal channels. The Federal Reserve has not commented publicly.
Mortgage filings 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 property 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 balance 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 whether an inquiry has begun.
Cook said in a media interview that she first learned of the allegations through press reports. They relate to 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 documentation to respond to legitimate questions and provide the facts.
