President Donald Trump said he will immediately remove Federal Reserve Governor Lisa Cook from her position, alleging “sufficient reason” to believe she made false statements on mortgage agreements. Trump cited constitutional powers he claimed gave him authority to act.
Cook pushed back, saying Trump had no power to fire her and that she would not step down. “I will not resign,” Cook said. “I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
The move comes as Trump escalates pressure on the central bank’s leadership—particularly Chair Jerome Powell—over what he views as resistance to lowering interest rates.
Cook is one of seven members of the Fed’s Board of Governors and sits on the 12-member Federal Open Market Committee, which sets U.S. interest rates. Governors are nominated by the president and confirmed by the Senate, meaning a successful removal would allow Trump to install a replacement more aligned with his push for rate cuts and his broader economic agenda.
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The Fed’s decisions directly affect borrowing costs for households and businesses, as well as savings rates at banks. U.S. interest rate policy is also closely monitored by central banks worldwide when setting their own monetary strategies.
Cook, along with Powell and other committee members, had previously voted to maintain current interest rates at the Fed’s last rate-setting meeting in July. Trump has repeatedly criticized Powell for maintaining higher interest rates, which he argued were hurting the economy, housing market, and business growth. Despite the pressure, Powell emphasized that interest rate moves must be based on inflation trends and labor market conditions, not political demands.
Cook was appointed by former President Joe Biden in 2022, when she became the first African-American woman to serve in the role. She hired the high-profile attorney Abbe Lowell to represent her on this issue, according to CNBC. “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,” she said in a statement.
Trump’s attempt to remove Cook can be challenged in federal court. Under the Federal Reserve Act of 1913, the president may dismiss a Fed governor only “for cause.” The law does not define “cause,” but it has traditionally been interpreted to mean malfeasance or dereliction of duty.
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Trump cited allegations from Federal Housing Finance Agency Director Bill Pulte, who claimed Cook made false statements on mortgage applications. In a letter to Cook on Monday, Trump linked Pulte’s allegations of mortgage fraud to what he described as public concerns about her conduct as a Fed governor.
Pulte applauded Trump’s move via a post on X. Meanwhile, Sen. Elizabeth Warren, in a statement Monday night, said, “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.”
Edward Mills, managing director at the financial advisory firm Raymond James, said Trump’s move marks an unprecedented challenge to central bank independence and signals the White House’s escalating effort to exert direct influence over monetary policy. He added that markets are likely to view this “attack on Fed independence negatively, amplifying uncertainty over future policy direction.”