US President Donald Trump has declared his intention to immediately remove Federal Reserve governor Lisa Cook. The move marks an unprecedented escalation in his confrontation with the central bank.
Trump claimed there was “sufficient reason” to accuse Cook of submitting false information in mortgage agreements. He argued that constitutional powers grant him authority to dismiss her. Cook firmly rejected the attempt, saying the president had no power to fire her. She insisted she would not resign.
No president has previously tried to dismiss a Federal Reserve governor. Trump’s decision follows months of pressure on the bank and its chair Jerome Powell, whom he accuses of refusing to cut interest rates fast enough.
Cook’s role inside the Fed
Cook is one of seven governors on the board and a member of the twelve-person committee that sets interest rates.
The Fed’s choices directly influence borrowing costs, savings rates, and global financial stability. Central banks worldwide often adjust their policies in response to US decisions.
At the July meeting, Cook voted with Powell and most members to hold rates steady. She was appointed in 2022 by President Joe Biden, becoming the first African American woman to serve as a governor.
Legal showdown looming
Trump’s announcement is expected to ignite legal battles. Analysts say the White House must prove valid grounds in court to justify her removal.
The clash between Trump, Cook, and Powell raises concerns about the Fed’s independence. Economists warn central banks must operate free from political influence to serve the public interest.
Cook accused Trump of attempting to remove her “for cause,” though she said no legal cause exists. She stated: “I will not resign. I will continue to fulfill my duties to strengthen the US economy, as I have since 2022.”
Her lawyer, Abbe David Lowell, pledged to fight the move through every legal channel. The Federal Reserve has not yet responded.
Mortgage dispute at the center
Trump announced his decision late Monday on Truth Social. He accused Cook of signing a document in Michigan declaring a property as her primary residence, then signing another in Georgia two weeks later with the same claim.
“It is inconceivable that you were unaware of your first commitment when making the second,” Trump wrote.
Market response unsettled
European markets opened lower on Tuesday after the announcement. US government bond yields also climbed.
The dollar briefly weakened against major currencies before regaining strength. Julia Lee of FTSE Russell commented: “The crucial question is whether Trump succeeds in replacing Cook. That could alter the Fed’s balance and shift investor confidence in the US.”
Allegations driven by Trump ally
Trump had already demanded Cook’s resignation last week. His call came after housing finance regulator Bill Pulte, a Trump ally, accused her of mortgage fraud. He urged Attorney General Pam Bondi to investigate. It remains unclear if an inquiry has been launched.
Cook said in a media interview that she first learned of the allegations through news reports. They concerned a mortgage application she filed four years before joining the Federal Reserve.
“I will not step aside because of claims circulated online,” she declared. She added she was compiling documents to address legitimate questions and present the facts.
