Federal Reserve Governor Lisa Cook plans to sue President Donald Trump over his attempt to remove her from office, setting the stage for a major legal battle over the independence of the U.S. central bank.
Cook, the first Black woman on the Fed board, was appointed to a 14-year term that runs through 2038. Under the Federal Reserve Act, governors can only be removed “for cause.” Her lawyer, Abbe Lowell, called Trump’s move “illegal” and vowed to challenge it in court.
Trump announced Monday that he was firing Cook for alleged mortgage misrepresentations made before she joined the Fed in 2022. He argued that “people at the Fed must be 100% above board” and suggested possible replacements, including White House economist Stephen Miran and former World Bank President David Malpass.
The Fed, however, issued a statement affirming that Cook remains in office unless a court rules otherwise. Analysts warn the standoff could undermine confidence in the Fed’s independence, roil global markets, and heighten political pressure on U.S. monetary policy ahead of the Fed’s September 16–17 meeting.
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