Trump seeks to fire Fed governor Lisa Cook -- but a legal fight looms

President Donald Trump moved to fire Federal Reserve governor Lisa Cook on Monday, escalating his campaign to exert more control over the central bank.

In a social media post, Trump said he was dismissing Cook in response to allegations from a Trump ally that she had made false statements on a mortgage application.

Cook said in a statement Trump has no authority to fire her, and she vowed to continue serving.

Under federal law designed to insulate the central bank from political pressure, Fed governors can only be removed for cause.

"The American people must be able to have full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve," Trump wrote in a letter addressed to Cook. "In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity."

Earlier this month, Bill Pulte, a Trump loyalist who oversees the mortgage giants Fannie Mae and Freddie Mac, accused Cook of mortgage fraud, citing two home loans she obtained weeks apart in 2021, before joining the Federal Reserve. The two properties were in Michigan and Georgia. Pulte said Cook had represented that each property would be used as her primary residence — a declaration that often results in more favorable loan terms.

Cook has not replied in detail to the allegations, but she insisted she would continue in her role at the Fed.

"President Trump purported to fire me 'for cause' when no cause exists under the law, and he has no authority to do so," Cook said in a statement. "I will continue to carry out my duties to help the American economy as I have been doing since 2022."

Cook's attorney, Abbe Lowell, promised to fight the firing.

"President Trump has taken to social media to once again 'fire by tweet' and once again his reflex to bully is flawed and his demands lack any proper process, basis or legal authority," Lowell said in a statement.

The effort to fire Cook comes in the midst of a high-pressure campaign by Trump and his allies to get the central bank to lower interest rates. Trump already has an opportunity to appoint one new member to the Fed's governing board, after the surprise resignation of Adriana Kugler earlier this month. Kugler ended her term a few months early to return to teaching at Georgetown University.

If Trump succeeds in ousting Cook, that would create another vacancy, potentially giving Trump appointees a majority on the seven-member board.

Democrats rallied to defend Cook, who was appointed to the Fed board by then-President Joe Biden.

"The illegal attempt to fire Lisa Cook is the latest example of a desperate President searching for a scapegoat to cover for his own failure to lower costs for Americans," said Massachusetts Sen. Elizabeth Warren, the top Democrat on the Senate Banking Committee, which oversees the Fed. "It's an authoritarian power grab that blatantly violates the Federal Reserve Act, and must be overturned in court."
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