Federal Reserve Governor Lisa Cook will file a lawsuit to block an attempt by President Donald Trump to remove her from office, Reuters reported Tuesday, citing her attorney. The move sets the stage for a potential legal showdown over presidential authority and the independence of the US central bank.
“His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis. We will be filing a lawsuit challenging this illegal action,” said Abbe Lowell, a high-profile Washington attorney representing Cook, in a statement.
The legal warning came one day after Trump announced he was firing Cook, the first Black woman to serve on the Federal Reserve Board, over allegations of “deceitful and potentially criminal conduct” tied to mortgage applications she filed in 2021, before joining the Fed.
Trump’s effort to remove Cook marks the latest in a string of aggressive moves aimed at reshaping the federal bureaucracy and reasserting political control over independent agencies. Since returning to office in January, Trump has dismissed several civil servants, suspended funding for agencies, and clashed with Congress over budget allocations.
“We need people that are 100% above board, and it doesn’t seem like she was,” Trump said during a meeting with reporters. He added that while he had “good people” in mind to replace Cook, he would respect a court ruling if it determined she must stay.
The Fed pushed back, issuing a statement that underscored the board’s independence and Cook’s current standing.
“Board members serve 14-year terms and are not easily removed from office,” the statement read, emphasizing that long terms are intended to shield monetary policy from political pressure and serve the “long-term interests of the American people.”
Although Trump claimed the dismissal was “effective immediately,” the Fed’s response makes clear that Cook remains in her position, pending any judicial intervention.
The next Federal Open Market Committee (FOMC) meeting is scheduled for September 16–17, and Cook is expected to participate unless a court intervenes before then.
The controversy centers on two mortgage loans Cook obtained in Michigan and Georgia in 2021, during her time as an academic. Trump alleges she misrepresented both properties as primary residences, a potential violation of mortgage rules.
On Monday, Trump sent a formal letter to Cook citing these alleged misrepresentations as “sufficient cause” for her removal under the Federal Reserve Act of 1913, which allows a Fed governor to be dismissed “for cause.”
The referral originated from William Pulte, a Trump-appointed director at the Federal Housing Finance Agency (FHFA), who forwarded the matter to Attorney General Pamela Bondi for investigation. Bondi has yet to comment on whether the Justice Department will pursue the case.
If successful in removing Cook, Trump could gain significant influence over the seven-member Federal Reserve Board, with two seats already filled by Trump appointees and a pending nomination of White House economist Stephen Miran, whose temporary term expires in January.
Trump has floated Miran as a possible replacement for Cook and is also reportedly considering David Malpass, the former World Bank president and a longtime Trump ally, according to The Wall Street Journal.
During his first term, Trump frequently pressured the Fed to slash interest rates and at one point threatened to fire Fed Chair Jerome Powell, though he eventually backed down. His renewed push for influence over monetary policy has raised alarm in financial markets.
On Tuesday, US Treasury yields steepened and the dollar dipped, as investors absorbed the implications of political interference at the Fed. Though Wall Street’s major indexes ended the day slightly higher, analysts warned that uncertainty over central bank independence could shake long-term investor confidence.
Lisa Cook’s term on the Fed Board runs through 2038. Her lawsuit, expected to be filed in federal court, will likely test the legal boundaries of presidential power over the nation’s central bank, an institution deliberately designed to be shielded from political influence.
The outcome could have significant consequences not only for Cook’s future but also for the credibility of the Federal Reserve and the stability of US financial policy in the Trump administration’s second term.
