WASHINGTON (BN24) — President Donald Trump announced Monday that he has removed Federal Reserve Governor Lisa Cook, a move that marks an unprecedented escalation of his clash with the U.S. central bank and sets the stage for a potential legal showdown that could reach the Supreme Court.
In a letter posted to his Truth Social account, Trump cited his constitutional authority and provisions of the Federal Reserve Act of 1913 in dismissing Cook. “You are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately,” the president wrote.
The decision injects uncertainty into the Federal Reserve’s independence. Under the Federal Reserve Act, presidents can only remove governors “for cause,” a term traditionally interpreted as severe misconduct or inability to serve. Legal experts say Trump’s unilateral firing will almost certainly be challenged in court, raising questions about executive power and the limits of presidential authority over the Fed.
Cook, a Biden appointee who joined the board in 2022, has been accused by the Trump administration of mortgage fraud. The allegations surfaced after Federal Housing Finance Agency Director Bill Pulte — a vocal critic of Fed Chairman Jerome Powell — publicly claimed on Aug. 20 that Cook declared two different properties as her primary residence at the same time. Pulte referred the matter to the Justice Department, which has launched an inquiry led by U.S. Pardon Attorney Ed Martin, according to reporting from POLITICO.
Trump seized on the accusations, demanding Cook’s resignation in a series of social media posts. “Cook must resign, now!!!” he wrote after Pulte’s claims became public. Cook rejected the pressure, stating she had “no intention of being bullied to step down from my position because of some questions raised in a tweet.”
Two days later, Trump vowed to remove her if she did not resign. “What she did was bad,” the president told reporters on Aug. 22. His order to terminate her tenure now sets in motion a constitutional test that could alter the balance between the White House and the central bank.
If courts uphold the dismissal, Trump will gain the ability to nominate Cook’s replacement, further reshaping the Fed’s seven-member board, where governors serve 14-year terms. Two of the current governors, Christopher Waller and Michelle Bowman, were appointed by Trump. Another vacancy opened earlier this year when Adriana Kugler resigned abruptly, and Trump has already nominated Stephen Miran, chair of the Council of Economic Advisors, to fill the seat.
The removal of Cook intensifies concerns about the central bank’s independence, which has already come under heavy strain during Trump’s presidency. He has repeatedly criticized Powell and the Fed for not lowering short-term interest rates, even threatening to fire Powell before his term as chair ends next year.
At the Fed’s annual symposium in Jackson Hole, Wyoming, on Aug. 22, Powell signaled that conditions “may warrant” rate cuts in the months ahead but stressed that the central bank would proceed “carefully.”
Trump’s move to oust Cook represents the boldest challenge yet to the Fed’s autonomy, with profound implications for the U.S. economy and the separation of powers.
