Trump Moves to Dismiss Fed Governor Cook Amid Controversy
On August 26, 2025, U.S. Federal Reserve Governor Lisa Cook is taking legal action to block President Donald Trump’s attempt to terminate her employment, claiming the president lacks the authority to do so, reports 24brussels.
Trump announced Cook’s dismissal was “effective immediately,” citing her alleged “deceitful and potential criminal conduct in a financial matter.” This accusation stems from a letter by Federal Housing Finance Agency Director Bill Pulte, who alleged that Cook engaged in mortgage fraud by claiming two primary residences in Michigan and Georgia in 2021 to secure favorable mortgage terms.
Cook’s lawyer, Abbe Lowell, asserted that the grounds for termination lack both factual and legal basis. “We will be filing a lawsuit challenging this illegal action,” he stated. Cook has publicly refused to resign, arguing that Trump’s claims do not constitute legitimate grounds for dismissal. “I will not resign,” she emphasized in her statement.
In response to inquiries during a cabinet meeting, Trump remarked, “She seems to have had an infraction. We need people that are 100 percent above board. And it doesn’t seem like she was.” He indicated that he is considering candidates to replace her, implying that alternatives are already being evaluated.
Earlier this month, following the resignation of Federal Reserve Governor Adriana Kugler, Trump nominated Stephen Miran, chair of the White House Council of Economic Advisers, to temporarily fill the vacant seat on the Federal Reserve Board of Governors.
The Justice Department has also initiated a criminal investigation into Cook’s alleged misleading statements on mortgage applications from before her appointment to the Federal Reserve Board on May 23, 2022. Cook, who was nominated by Joe Biden, made history as the first Black woman to join the Fed’s leadership. This move has been characterized by media outlets as “unprecedented,” reflecting an unusual challenge to the independence of the Federal Reserve.
The Federal Reserve has stated it will comply with any court ruling regarding Cook’s status. “Congress, through the Federal Reserve Act, directs that governors serve in long, fixed terms and may be removed by the president only ‘for cause’. Long tenures and removal protections for governors serve as a vital safeguard, ensuring that monetary policy decisions are based on data, economic analysis, and the long-term interests of the American people,” the Fed communicated.
Brookings Institution Senior Fellow Darrell West remarked on the situation, suggesting that Trump may not have the legal authority to dismiss Cook, given the historical context in which no Federal Reserve Board member has been dismissed in a century. West asserted, “He is convicting her without any due process or legal process … Cook is within her rights to stay on the board because she has not been charged with any crime.”
Dean Baker, co-founder of the Center for Economic and Policy Research, criticized the approach of Trump’s political appointees searching through mortgage records for possible wrongdoing among political adversaries, asserting that this reflects a broader strategy to undermine those who oppose him.
The ongoing conflict appears to be fueled by Trump’s dissatisfaction with the Fed’s monetary policies, particularly its reluctance to lower interest rates as he has demanded. Cook has cautioned that the trade policies endorsed by Trump could potentially harm U.S. productivity, compelling the Fed to increase interest rates to manage inflation under less favorable economic conditions.
Clay Ramsay, a researcher at the Center for International and Security Studies at the University of Maryland, concluded that Cook’s legal battle may set a precedent for any future attempts by Trump to challenge Federal Reserve leadership, indicating a broader struggle over the Fed’s autonomy.
