Federal Reserve Governor Lisa Cook will take legal action to stop President Donald Trump from removing her from office, her lawyer said on Tuesday. The lawsuit could spark a lengthy court battle over the White House’s influence on U.S. monetary policy.
Cook’s lawyer, Abbe Lowell, argued that Trump’s attempt to fire her “lacks any factual or legal basis” and confirmed a lawsuit will soon be filed. The announcement came one day after Trump accused Cook, the first Black woman to serve on the Fed board, of mortgage-related misconduct and declared he would dismiss her. Cook responded that the president has no authority to fire her and vowed to continue serving.
The clash adds to Trump’s efforts to reshape independent institutions. Since returning to office in January, he has dismissed hundreds of thousands of civil servants, dismantled agencies, and withheld billions in spending approved by Congress. Trump has also intensified pressure on the Fed to slash interest rates, even threatening to fire Fed Chair Jerome Powell before stepping back from that threat.
Markets showed limited immediate reaction. U.S. stocks were mostly flat, while the dollar slipped and Treasury yields reflected expectations for near-term rate cuts. Still, the controversy raised concerns over central bank credibility.
Trump claimed Cook misrepresented two homes as primary residences in mortgage applications before joining the Fed in 2022. Critics argue the allegations date from before her appointment and were already public during her Senate confirmation. Legal scholars warn the case could test the boundaries of presidential power, the Federal Reserve Act’s “for cause” removal clause, and the Fed’s tradition of independence.
If Cook is forced out, Trump would gain another appointment to the Fed board, further strengthening his influence over U.S. monetary policy. Analysts caution that undermining the Fed’s autonomy could shake global confidence in U.S. financial stability.
