Fed Governor Cook says she won't resign after Trump fired her
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Trump fires Fed Governor Lisa Cook, citing Article II authority, but Cook refuses to resign, setting the stage for a legal battle over the Federal Reserve’s independence.
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Lisa Cook speaks during the Senate Banking, Housing and Urban Affairs Committee confirmation hearing on February 3, 2022, in Washington. (AP)
US President Donald Trump announced on Monday that he had fired Federal Reserve Governor Lisa Cook, citing Article II of the Constitution and the Federal Reserve Act of 1913. The White House rapid response team shared a letter on X stating that Cook was "removed" from her position, "effective immediately."
The move is unprecedented and immediately sparked a legal and institutional crisis, raising serious concerns about the independence of the Federal Reserve.
Cook responded swiftly, rejecting Trump’s action as illegitimate. "President Trump purported to fire me 'for cause' when no cause exists under the law, and he has no authority to do so," she said in a statement issued through her legal counsel at Lowell & Associates.
"I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022," Cook added.
Her attorney, Abbe David Lowell, pledged to take "whatever actions are needed" to block what he called an attempted illegal removal. Lowell is also representing New York Attorney General Letitia James, another target of legal pressure from the Trump administration.
Fed Independence and Legal Precedent at Stake
The action marks a dramatic escalation from Trump’s earlier pressure campaigns on the Federal Reserve, turning speculation about central bank interference into political reality.
While the Federal Reserve Act allows a president to remove a governor "for cause," legal experts note that no Fed governor has ever been fired, and the standards for such an action remain untested in court.
The "cause" cited by Trump appears to stem from allegations raised by Federal Housing Finance Agency head Bill Pulte, who last week referred Cook to the Justice Department for possible criminal prosecution. Pulte claimed Cook falsified mortgage documents and property records to secure favorable loan terms, potentially committing fraud years before she joined the Fed.
Cook has denied wrongdoing, stating that she refuses “to be bullied” over unsubstantiated claims and would continue gathering accurate information to respond to any legitimate concerns.
News of Trump’s move sent ripples through financial markets. Treasury yields rose, gold prices spiked, and the dollar weakened. US stock futures also fell, reflecting investor anxiety over political interference in monetary policy and uncertainty at the central bank.
Analysts warn that undermining the Fed’s credibility could damage its ability to manage inflation, maintain financial stability, and assure markets of its independence.
Trump seeks further control over Federal Reserve
Cook’s term was not set to expire until 2038. She is the first Black woman to serve on the Federal Reserve’s Board of Governors, appointed by former President Joe Biden.
If Trump succeeds in removing her, it would mark the second Fed vacancy in under a month after Adriana Kugler, a member of the Federal Reserve's Board of Governors, resigned earlier in July. The White House has since nominated Council of Economic Advisers Chair Stephen Miran as an interim replacement until January.
Critics argue that the pattern of targeting Fed officials reflects a deeper push by Trump to align the central bank with his economic agenda, including pressure to slash interest rates ahead of the November election.
On a related note, last month, Trump expressed his desire for Federal Reserve Chair Jerome Powell to step down, while also acknowledging that many have warned about the potential market disruption if he, as president, were to take action to remove Powell from his position.
Trump made his remarks on Powell in an interview with the Real America's Voice network on July 16.
In the interview, Trump stated, "I'd love if he wants to resign, that would be up to him. They say it would disrupt the market if I did," while later reiterating his criticism regarding the costs of the renovation of the Fed's headquarters. Earlier, a Fed spokesperson had referenced Powell's consistent stance, noting that he has repeatedly stated his intention not to resign, even if asked.
