Fed Governor Fired By President Trump Refuses To Step Down

President Donald Trump announced on Monday (August 25) that he has fired Federal Reserve Governor Lisa Cook, citing allegations of mortgage fraud. Trump claimed on his Truth Social platform that Cook committed fraud by claiming two primary residences in 2021 to secure better mortgage terms. However, Cook, who was appointed by President Joe Biden in 2022, insists that Trump lacks the authority to remove her from the board.

In a statement, Cook declared, "President Trump purported to fire me 'for cause' when no cause exists under the law, and he has no authority to do so." She emphasized her intention to continue her duties at the Federal Reserve, highlighting that her appointment is for a 14-year term. Legal experts note that for-cause removals typically require a formal proceeding, which has not occurred in this case.

Cook’s attorney, Abbe Lowell, announced that he is filing a lawsuit to challenge the attempt to fire her.

“President Trump has no authority to remove Federal Reserve Governor Lisa Cook. His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis. We will be filing a lawsuit challenging this illegal action,” he said in a statement sent to CNN.

The move has sparked significant controversy, with Democratic leaders like Senator Elizabeth Warren condemning it as an "authoritarian power grab" that violates the Federal Reserve Act. Trump's attempt to remove Cook marks an unprecedented step in his ongoing efforts to influence the Federal Reserve's decisions, particularly regarding interest rates.

The Congressional Black Caucus criticized Trump's actions, stating they are a distraction from economic issues and an attempt to install a loyalist at the Fed. Cook's attorney, Abbe Lowell, has promised to fight the dismissal, arguing that Trump's demands lack legal basis.

The situation is expected to lead to a legal battle that could reach the Supreme Court. The outcome could have significant implications for the independence of the Federal Reserve, which plays a crucial role in managing U.S. monetary policy.