Lisa Cook Issues Defiant Message to Trump Over Federal Reserve Firing

Federal Reserve Governor Lisa Cook addressed President Donald Trump’s announcement that he had fired her, saying she would not resign from the Fed’s seven-member board.

Trump on Monday cited alleged mortgage-related misconduct when he said he had fired Cook, who has denied the allegations.

“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 an emailed statement to The Associated Press. “I will not resign.”

Newsweek contacted Federal Reserve Governor Cook, and her attorney, Abbe David Lowell, for comment via email outside of normal business hours on Tuesday.

Why It Matters

The dispute immediately raised questions about presidential authority to remove a Fed governor “for cause,” threatened to test the Federal Reserve’s political independence and signaled a likely court challenge that could reach the Supreme Court—with potential implications for monetary policy and markets.

The Federal Reserve Act allows a president to remove a sitting governor only “for cause,” a standard that legal scholars and officials said has not been definitively tested in this context. The move, unprecedented in modern Federal Reserve history, risked politicizing a central bank designed to make decisions insulated from short-term political pressure. Trump has repeatedly called on the Fed to lower interest rates, often expressing frustration that it wasn’t doing so.

What To Know

Trump cited a criminal referral and allegations about mortgage applications in a termination letter he posted online, saying the conduct undercut public confidence in a Federal Reserve governor’s integrity. He wrote that he had “determined that faithfully executing the law requires [Cook’s] immediate removal from office.”

The allegations originated with Federal Housing Finance Agency Director Bill Pulte, who referred the matter to the Justice Department after raising questions about mortgage filings Cook made for properties in Michigan and Georgia in 2021. Pulte accused Cook of claiming two primary residences—one in Ann Arbor, Michigan, and another in Atlanta—to secure more favorable mortgage terms.

Cook has not been charged with a crime. Newsweek has contacted Pulte outside of regular office hours.

Cook, whom former President Joe Biden had nominated, and the Senate confirmed in 2022 as the first Black woman to serve on the Federal Reserve Board, rejected the removal and said she would remain on the board. “I will continue to carry out my duties to help the American economy as I have been doing since 2022,” she said.

Cook’s attorney, Abbe David Lowell, said the legal team would act to block what he described as an unlawful attempt to remove her. “We will take whatever actions are needed to prevent his attempted illegal action,” Lowell told CNN in a statement.

What People Are Saying

President Donald Trump wrote in his letter addressed to Cook: “…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. 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.”

Senator Elizabeth Warren, the top-ranking Democrat on the Senate Banking Committee, said the removal amounted to “an authoritarian power grab that blatantly violates the Federal Reserve Act, and must be overturned in court.”

Alan Blinder, a former vice chair at the Fed told CNN Monday night: “The bigger picture is sadly simple: The Federal Reserve is designed to be independent of politics, for very good reasons. He is trying to end that and make it an arm of the Trump administration, which will be very bad for monetary policy if it happens.”

What Happens Next

The Federal Reserve’s next scheduled policy meeting is mid-September, a timeline market observer noted as relevant to near-term policy signaling.