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President Donald Trump said late Monday he has removed Federal Reserve Governor Lisa Cook from her position, a move that immediately triggered questions about the independence of the nation’s central bank and is expected to spark a court fight.
In a letter posted to Truth Social, Trump wrote: “Pursuant to my authority under Article II of the Constitution of the United States and the Federal Reserve Act of 1913, as amended, you are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately.”
Trump cited a “criminal referral” from Federal Housing Finance Agency Director William Pulte, who has accused Cook of mortgage fraud. Cook has not been charged with any crime.
The Federal Reserve did not immediately respond to a request for comment.
Cook, appointed by President Joe Biden in 2022 to a term running until 2038, is the first Black woman to serve on the Fed’s powerful board of governors, which plays a central role in setting U.S. monetary policy. She said last week she had “no intention of being bullied to step down” and vowed to provide accurate information about her financial history.
“I do intend to take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions,” Cook said.
Under the Federal Reserve Act, governors can only be removed “for cause,” typically interpreted to mean misconduct. The Supreme Court has held that while the president can remove members of some independent agencies, the Fed is “a uniquely structured, quasi-private entity,” leading many legal experts to believe Trump’s action will face steep challenges.
Trump has repeatedly attacked the Fed and its chair, Jerome Powell, blasting interest rate policies and accusing the board of undermining his presidency. He has called Powell “stupid” and said the Fed “should be ashamed of themselves.”
The announcement rattled markets. The U.S. Dollar Index, which tracks the dollar against a basket of global currencies, dropped sharply after Trump’s letter.
Pulte, a Trump ally, amplified the allegations against Cook on social media. “Fraud will not be tolerated in President Trump’s housing market,” he posted on X after Trump’s announcement, adding, “If you commit mortgage fraud in America, we will come after you, no matter who you are.”
Cook’s removal could give Trump another chance to reshape the central bank. He has nominated economist Stephen Miran to the board for a short-term seat and will also have the opportunity to replace Powell when his term ends in May.
The looming legal battle will test the limits of presidential authority over the Federal Reserve, an institution long regarded as independent from direct political interference.
