On Monday, Federal Reserve Governor Lisa Cook made it clear she isn’t stepping down, despite President Donald Trump’s announcement that he was removing her “effective immediately.”
Trump’s letter, shared by the White House, accused Cook of mortgage fraud specifically, misrepresenting two different properties as her “primary residence” in separate loan applications. The claims were amplified by Bill Pulte, head of the Federal Housing Finance Agency and a Trump ally.
In his letter, Trump wrote:
“It is inconceivable that you were not aware of your first commitment when making the second.”
But the move is unprecedented. In the Federal Reserve’s 110-year history, no sitting governor has ever been fired by a president. The central bank was deliberately designed to operate independently of the White House so political leaders could not manipulate monetary policy for short-term gain.
Cook appointed in 2022 by President Joe Biden and the first Black woman ever to serve on the Fed Board quickly pushed back. Through her attorney Abbe Lowell, she declared the firing “illegal” and insisted Trump has no authority to remove her.
“I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022,” Cook said in her statement.
Legal experts warn that this clash could spark a constitutional showdown over central bank independence. Trump has also hinted at removing Fed Chair Jerome Powell, adding to fears he is trying to reshape the Fed to force faster interest rate cuts that align with his economic agenda.
Whether courts uphold Trump’s action or block it, this moment could mark a turning point for the balance of power between the White House and the Federal Reserve.
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