In an unprecedented escalation of his feud with the U.S. central bank, President Donald Trump announced late Monday he would remove Federal Reserve Governor Lisa Cook from her position, citing alleged false statements on mortgage applications.
Cook, the first African American woman to serve on the Fed’s board of governors, immediately pushed back, insisting Trump had no authority to fire her. “I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022,” she said. Her lawyer, Abbe David Lowell, vowed to take “whatever actions are needed” to stop what he called Trump’s “attempted illegal action.”
Trump, posting on his social media platform Truth Social, alleged Cook signed conflicting mortgage documents in Michigan and Georgia, calling the situation “inconceivable.” The claims originated in a letter from housing finance regulator Bill Pulte, a Trump ally, who referred the matter to the Justice Department, though it is unclear whether an investigation is underway.
The move is almost certain to trigger a court battle over the limits of presidential power. Federal Reserve governors are appointed to 14-year terms and historically shielded from political dismissal in order to preserve the bank’s independence. Legal experts say the White House would need to prove sufficient cause in court to justify removing Cook.
Markets reacted nervously. European stocks dipped and U.S. Treasury yields rose after Trump’s announcement, though the U.S. dollar later recovered from an initial slide. Analysts warned that if Trump were to succeed, it could raise serious concerns about the Fed’s autonomy and the future stability of U.S. monetary policy.
Cook was appointed by President Joe Biden in 2022 and has consistently voted with Fed Chair Jerome Powell and other board members to keep interest rates steady. Trump has repeatedly clashed with Powell, pressing him to cut rates more aggressively, and has floated the idea of reshaping the Fed’s leadership to align with his policies.
For now, the standoff between Trump and Cook pits presidential power against central bank independence in a way never tested before — a confrontation with profound implications for both U.S. financial markets and the global economy.