In a striking move that raises new concerns about the independence of the U.S. central bank, President Donald Trump has dismissed Federal Reserve Governor Lisa Cook, citing alleged misrepresentations on her mortgage applications. The action was made public through a letter released on Trump’s Truth Social platform on Monday.
Trump’s decision to terminate Cook marks a historic escalation in the long-standing tension between the White House and the Federal Reserve, particularly amid Trump’s vocal dissatisfaction with the central bank’s reluctance to lower interest rates in line with his expectations.
The legality of Cook’s firing is likely to become a pivotal test case, as the Federal Reserve Act of 1913 limits a president’s authority to remove Fed governors, allowing termination only “for cause.” Although the law does not specifically define “cause,” it has traditionally been interpreted as gross misconduct or neglect of official duties, which Trump has been using as the reason for firing Cook.
Legal experts anticipate that Cook may challenge her removal in federal court, potentially setting up a battle that could reach the Supreme Court. Over recent months, Trump has intensified his criticism of the Fed and its chairman, Jerome Powell, blaming them for resisting his calls for aggressive rate cuts.
