President Donald Trump set off a political and financial firestorm on Monday night after announcing that he was removing Federal Reserve Governor Lisa Cook from her post “effective immediately.” The announcement came in a letter Trump posted on Truth Social, citing his authority under the Constitution and the Federal Reserve Act.
But can a U.S. president really fire a Fed governor? Legal experts say it’s not that simple—and the fight could head straight to court.
Watch this much later:
Trump’s letter and the allegations
In his letter, Trump referenced a “criminal referral” from William Pulte, director of the Federal Housing Finance Agency, accusing Cook of mortgage fraud. Trump wrote, “You are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately.”
Trump quickly reposted Pulte’s claims online, demanding that Cook “resign now”. Pulte doubled down on X (formerly Twitter), saying, “Fraud will not be tolerated in President Trump’s housing market.” Cook has not been charged with any crime, and she denies the accusations completely.
Cook pushes back
Lisa Cook, the first Black woman to serve on the Federal Reserve’s board, wasted no time responding. “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so. I will not resign,” she said.
Her attorney, Abbe Lowell, added that Trump’s action “lacks any proper process, basis, or legal authority” and confirmed that Cook will file a lawsuit to block her removal. “His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis,” Lowell said.
Can the president even do this?
Under the Federal Reserve Act, governors can only be removed “for cause”, meaning serious wrongdoing. The Fed is designed to be independent from politics, and its governors serve long terms to avoid pressure from the White House. Cook’s current term runs until 2038.
The Supreme Court recently ruled that some independent agency heads can be removed by the president, but it described the Federal Reserve as a “unique, quasi-private institution,” suggesting a higher legal bar. If Cook sues, the case could test just how much power a president has over the central bank.
Political Fallout
Reaction to Trump’s move has been swift and sharp. Sen. Elizabeth Warren (D-Mass.) called it “an authoritarian power grab that blatantly violates the Federal Reserve Act.” She argued that Trump is “searching for a scapegoat to cover for his own failure to lower costs for Americans.”
Republicans have been quieter. Spokespeople for Senate Banking Committee Chairman Tim Scott (R-S.C.) declined to comment.
Why do you think it matters
The Fed plays a critical role in setting interest rates and managing inflation. Cook has a permanent vote on its powerful rate-setting committee. If she were removed, Trump would have a chance to install his own pick, further shaping monetary policy.
The U.S. Dollar Index—an indicator of the dollar’s strength—fell sharply after Trump’s announcement, showing how sensitive financial markets are to changes at the Fed.
What comes next
Cook insists she will not step aside and says she is preparing answers to any questions about her financial history. Legal experts expect a court battle over whether Trump can enforce his dismissal letter.
Trump has already nominated economist Stephen Miran to a Fed board seat and will get to pick a new chair when Jerome Powell’s term ends in May. But for now, the Fed’s 12-member committee still has a majority not appointed by Trump, limiting his direct control.
“This is a new attempt to gain more influence over the Fed,” said Claudia Sahm, a former Fed economist. “They’re pulling every lever they can find.”
With lawsuits looming and markets on edge, the nation is watching to see whether a president can really fire a Federal Reserve governor—or whether the Fed’s independence will hold.
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