President Trump Fires Federal Reserve Board Governor Lisa Cook

In an unprecedented move, U.S. President Donald Trump has fired Federal Reserve Board Governor Lisa Cook, a decision that economists say calls into question the independence of the central bank. Trump posted a termination letter addressed to Cook on social media, citing allegations that she made false statements on applications for home mortgages. The allegations of mortgage fraud are unfounded as Cook has not been charged or convicted of any wrongdoing. The Trump administration has accused several other public figures of mortgage fraud, including New York Attorney General Letitia James and California Senator Adam Schiff. In the matter of Cook, the mortgagee fraud claims and subsequent firing ratchet up attacks on the U.S. Federal Reserve’s independence as Trump pushes for interest rates to be lowered. Cook responded in a written statement, saying “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so.” Cook, who is the first black woman to serve as a central bank governor in the U.S. added: “I will not resign… I will continue to carry out my duties to help the American economy.” She also mentioned that she has hired the high-profile lawyer Abbe Lowell to represent her in the matter of the Trump firing. The Federal Reserve has not made any public comment on the firing of Cook by President Trump or his social media post. Media commentators were quick to say that the matter is likely to make its way up to the U.S. Supreme Court and that it is an unprecedented move by a sitting president. Congress removed the president’s authority to unilaterally fire a Fed governor in the Federal Reserve Act of 1913, which states that the president can only do so “for cause.” While the law does not state what constitutes “cause,” it has historically been understood to mean malfeasance or dereliction of duty. Economists are sounding the alarm on the future independence of the U.S. central bank, saying it is of paramount importance that the Federal Reserve be able to make decisions on interest rates and the American economy without political pressure. Trump has repeatedly threatened to fire Federal Reserve Chair Jerome Powell if the central bank doesn’t begin to lower interest rates to boost the U.S. economy and stock market. At the same time, Trump has named a number of political loyalists that he is considering to be the next Federal Reserve chair when Powell’s current term ends in spring 2026.