Federal Reserve Governor Lisa Cook has filed a lawsuit against President Donald Trump, alleging an 'unprecedented and illegal attempt' to fire her. The suit, lodged in federal court in Washington on Thursday, challenges the president's authority to remove her from the board of governors, setting the stage for a legal battle over the central bank's independence.
Trump announced Cook's dismissal on Monday, citing an unconfirmed allegation that she obtained a mortgage on a second home she incorrectly described as her primary residence. Cook, appointed by Joe Biden in 2022, has refused to step down, arguing that Trump lacks the power to fire her under the Federal Reserve Act, which requires 'cause' for removal. Her lawyers contend the allegation is a pretextual 'clerical error' and part of a broader effort to undermine the Fed's independence.
The lawsuit notes that Cook learned of her dismissal via Trump's Truth Social post, not through official channels, and argues that her removal violates her Fifth Amendment due process rights. A White House spokesperson, Kush Desai, defended the move, stating that Trump 'determined there was cause' and that the removal 'improves the Federal Reserve board’s accountability and credibility.'
A federal judge has scheduled a hearing for Friday at 10 am ET, with the case likely to reach the Supreme Court. Cook's lawsuit seeks to void her firing, warning that allowing the president to remove board members over policy disagreements would render the Fed's independence 'illusory.' The suit highlights that Trump has publicly pressured the Fed to cut interest rates, and his administration has pursued other political opponents.
