US President Donald Trump has declared that he will remove Federal Reserve governor Lisa Cook from office without delay. The announcement marks a historic escalation in his battle with the central bank.
Trump claimed there was “sufficient reason” to accuse Cook of giving false information on mortgage agreements. He cited constitutional authority that he argued grants him the power to act. Cook rejected the decision, stressing that the president has no right to dismiss her. She said she would not resign.
No US president has ever attempted to remove a member of the Federal Reserve’s board. The move comes as Trump increases pressure on the central bank and its chair Jerome Powell. He blames Powell for refusing to cut interest rates quickly.
Cook’s key role in setting US policy
Cook is one of seven governors on the board and sits on the twelve-member committee that decides interest rates.
The Fed’s decisions influence the cost of loans for Americans, savings rates in banks, and global financial markets. Central banks worldwide watch US rates closely when shaping their policies.
At the July meeting, Cook voted with Powell and most members to keep interest rates steady. President Joe Biden appointed her in 2022, making her the first African American woman to hold the position.
Court fight appears inevitable
Trump’s order is expected to spark a courtroom battle. Legal experts say the White House will need to prove valid grounds for removal.
The clash between Trump, Cook, and Powell has intensified concerns about the independence of the Federal Reserve. Economists argue central banks must remain free of political influence to safeguard the public interest.
Cook said in a statement that Trump had tried to fire her “for cause” without legal justification. She stated: “I will not resign. I will continue serving the US economy, as I have since 2022.”
Her lawyer, Abbe David Lowell, vowed to fight Trump’s move using every legal avenue. The Federal Reserve has not commented publicly.
Dispute over mortgage filings
Trump announced his decision Monday night on his social media platform 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.
Markets unsettled by decision
European stock markets opened lower on Tuesday after the news broke. Yields on US government bonds also rose.
The dollar weakened briefly against major currencies before recovering. Julia Lee of FTSE Russell commented: “The crucial issue is whether Trump succeeds in removing Cook. That could shift the Fed’s composition and alter investor confidence in the US.”
Allegations began with Trump ally
Trump had already demanded Cook’s resignation last week. His call followed a letter from housing finance regulator Bill Pulte, a close Trump ally, who accused 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 filed four years before joining the Federal Reserve.
“I will not be forced out by accusations on social media,” she said. She added that she was collecting all documents to answer legitimate questions and establish the facts.
