In brief
In a significant move, Federal Reserve governor Lisa Cook has stated her intention to file a lawsuit against President Trump, who ordered her removal from the Federal Reserve Board. Cook's attorney argues that Trump lacks the legal authority to dismiss her, as the president cited insufficient grounds related to alleged false statements about her mortgage. This situation has escalated tensions between Trump and the U.S. central bank, amidst ongoing debates about interest rate policies and Fed independence.
Federal Reserve governor Lisa Cook will file a lawsuit challenging her removal by President Donald Trump, marking a major escalation in the president's battle with the US central bank.
President Trump has no authority to remove Federal Reserve Governor Lisa Cook, her lawyer Abbe David Lowell said in a statement.
The president has said there was sufficient reason to believe Cook had made false statements on her mortgage, and cited constitutional powers which he said allowed him to remove her.
The unprecedented move comes as Trump has put increasing pressure on the Fed—especially its chair Jerome Powell—over what he sees as an unwillingness to lower interest rates.
Cook is one of seven members of the Fed's board of governors and was appointed by President Joe Biden in 2022, being the first African American woman to serve in this role. Her legal challenge is poised to raise complex questions concerning the legal grounds for removal and the Fed's independence from political influence.
Following Trump's announcement of her removal via social media, Cook asserted she would not resign, declaring, I will continue to carry out my duties to help the American economy as I have been doing since 2022. Her lawyer noted Trump's actions lacked factual and legal basis and urged against what they term an illegal firing.
This incident reignites discussions on the independence of the Federal Reserve, which many economists argue is essential for making unbiased financial policy in the public interest.
