Donald Trump has set up a historic clash with the US central bank after declaring he has fired Federal Reserve governor Lisa Cook, a move she insists is unlawful and refuses to accept.
In a letter posted late Monday on his Truth Social platform, Trump accused Cook of making false statements on mortgage documents and claimed his constitutional powers gave him authority to remove her from the Fed’s powerful board of governors.
Cook, however, hit back almost immediately. “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” she said in a statement. “I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
Her attorney, Abbe David Lowell, branded the move “illegal” and vowed to challenge it. The Fed itself has remained silent, but legal experts say the standoff could end up in court testing the limits of presidential power over an institution designed to operate independently of the White House.
The controversy began with allegations of mortgage fraud first aired by Trump ally Bill Pulte, who called for an investigation into Cook’s property dealings. Trump seized on the claims, saying Cook had committed to one house in Michigan as her primary residence, then signed a second mortgage weeks later in Georgia with the same declaration. Cook has denied wrongdoing, insisting the matter dates back years before her Fed appointment and was raised publicly only through “a tweet.”
The president had already demanded her resignation last week. By announcing her dismissal now, Trump has crossed into uncharted territory: never in the Fed’s 111-year history has a sitting governor been removed in this way.
The dispute lands amid Trump’s intensifying feud with Fed Chair Jerome Powell, whom he has ridiculed as a “stubborn moron” for resisting his calls to slash interest rates. Markets quickly reacted to the turmoil: the US dollar slipped in Asian trading Tuesday as investors calculated that Trump’s next appointee would push harder for cuts.
For Cook, the first Black woman ever to sit on the Fed’s board, the fight is as much about principle as position. “I have no intention of being bullied to step down,” she said. And if she holds her ground, the United States could be headed for a constitutional tug-of-war between the White House and the country’s most powerful economic institution.
