Federal Reserve Governor Lisa Cook has filed a lawsuit against President Donald Trump, challenging his attempt to remove her from office in what could become a landmark case over the independence of the U.S. central bank.
In her filing, Cook asked the court to declare Trump’s firing order “unlawful and void,” naming both the president and Fed Chairman Jerome Powell as defendants. The case pits the White House directly against the Federal Reserve’s governing structure, with potentially sweeping implications for monetary policy and central bank autonomy.
Trump justified his move by alleging that Cook falsified information on her mortgage applications, citing constitutional authority to remove her “for cause.” The allegations, originally raised in a letter from housing finance regulator and Trump ally Bill Pulte, claim Cook signed conflicting documents stating that two homes in different states were both her primary residence. No charges have been filed, and it remains unclear whether Cook is under investigation.
Cook’s attorney, Abbe Lowell, dismissed the allegations as unsubstantiated, arguing that the president’s action undermines the Federal Reserve Act, which requires a legitimate showing of cause before a governor can be removed. “This case challenges President Trump’s unprecedented and illegal attempt to remove Governor Cook from her position, which, if allowed, would be the first of its kind in the Board’s history,” Lowell wrote in the lawsuit.
The White House, however, insists Trump acted within his authority. Spokesperson Kush Desai defended the decision, stating, “The President determined there was cause to remove a governor who was credibly accused of lying in financial documents from a highly sensitive position overseeing financial institutions.”
The battle comes as Trump continues to pressure the Fed to cut interest rates, a move resisted by Powell and most of the board, including Cook. At the July policy meeting, Cook voted with Powell to hold rates steady, a stance at odds with Trump’s economic agenda.
If successful, Trump’s bid to remove Cook could allow him to appoint a more dovish policymaker, aligning the Fed closer with his push for lower borrowing costs. But legal experts say the case could ultimately end up before the Supreme Court, setting a precedent for presidential power over the central bank.
