Federal Reserve Governor Lisa Cook Files Lawsuit Against Trump Admin After President Tries To Remove Her From Board

2025-08-28 10:08:26

(MENAFN- Live Mint) Federal Reserve Governor Lisa Cook has filed a lawsuit against the Trump administration to challenge the President's attempt to remove her from office, setting the stage for an unprecedented legal battle that could test the independence of the US central bank.

Fed independence at stake

The lawsuit highlights long-standing protections around the Fed's political independence. The Supreme Court has previously signaled that“for cause” removals require due process. Cook's suit argues that the president's unilateral decision undermines both her rights and the Fed's institutional autonomy.

“This case is about more than one individual-it is about protecting the Federal Reserve's independence from improper political interference,” Cook's legal team said in a statement.

First attempted firing in Fed's 112-year history

No president has ever sought to fire a sitting Federal Reserve governor until President Donald Trump announced Cook's removal late Monday on his Truth Social account. He cited allegations of mortgage fraud dating back to 2021, before her appointment to the Fed board.

Legal experts note that under existing precedent, Presidents cannot dismiss Fed officials over policy disputes, but they may do so“for cause”-usually defined as misconduct or neglect of duty. Cook has not been charged with any crime, nor has she been given an opportunity to formally respond to the allegations.

White House criticism

The firing comes amid Trump's repeated public clashes with Fed Chair Jerome Powell and other policymakers for not cutting interest rates faster. The Fed's key short-term rate stands at 4.3% after a one-point reduction late last year. Powell recently indicated that another rate cut is likely at the upcoming Sept. 16–17 meeting.

Critics argue that the allegations against Cook may be a pretext to create an opening on the Fed board for a Trump-aligned nominee. Trump has previously stated he will only appoint officials who back lower rates.

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