(MENAFN) US President Donald Trump has moved to remove Federal Reserve Governor Lisa Cook, but her legal team has indicated they will challenge the decision, arguing that Trump lacks the authority to dismiss her.

In a letter to Cook on Monday, shared on his Truth Social platform, Trump stated that he had “sufficient cause” to fire Cook, who made history as the first Black woman to serve on the Federal Reserve Board (FRB). Trump’s justification for the dismissal was based on allegations made by Bill Pulte, the Director of the Federal Housing Finance Agency and a Trump appointee. Pulte claimed that Cook had falsified records in order to secure better mortgage terms on two homes—one in Michigan and another in Georgia—by misrepresenting them as her primary residences.

Trump argued that these allegations compromised Cook’s integrity and ability to serve as a financial regulator, invoking a provision from the Federal Reserve Act that he believes allows for the removal of governors for cause.

Cook, who was appointed to the Federal Reserve in 2022 by President Joe Biden and has a term lasting until 2038, responded through her lawyer on Monday. She stated that Trump’s attempt to fire her was unlawful, claiming there was no legitimate cause under the law and reaffirming her refusal to resign.

Legal experts have raised doubts over whether Trump has met the legal threshold for dismissal, as the allegations remain unproven and pertain to personal matters. According to the Federal Reserve Act, governors can only be removed for reasons such as neglect of duty or misconduct.

Since taking office, Trump has frequently criticized the Federal Reserve for not implementing more aggressive monetary easing. The central bank, however, has maintained its independence and resisted calls to lower interest rates, warning that Trump’s trade policies, including tariffs, could exacerbate inflation. Trump has countered that tariffs are not the main cause of rising prices, instead blaming Fed Chair Jerome Powell for keeping interest rates too high, which increases debt-servicing costs.

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