President Trump Fires Fed Governor Lisa Cook, Sparking Legal Showdown
In a dramatic move, President Donald Trump has announced the removal of Federal Reserve Governor Lisa Cook, citing alleged false statements on mortgage documents. Cook has rejected the president’s authority to fire her, setting up a potential legal and institutional showdown with the US central bank.
10:47 AM Aug 26, 2025 IST
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Aakash Khuman
President Trump declared on Truth Social that he had dismissed Lisa Cook from the Federal Reserve Board of Governors, effective immediately. In his letter, he alleged that Cook made conflicting statements on mortgage agreements, giving him “sufficient reason” to remove her.
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Lisa Cook Pushes Back
Cook firmly rejected Trump’s decision, insisting the president has “no authority to do so.” In a statement, she said she would not resign and would continue her duties at the Fed, where she has served since 2022. Her attorney, Abbe David Lowell, called Trump’s move “illegal” and vowed to take all necessary legal actions to prevent it.
Historic and Legal Implications
If enforced, this would mark the first-ever removal of a Federal Reserve governor in the central bank’s 111-year history. Experts suggest the White House may need to prove in court that there was sufficient legal cause. The Federal Reserve, which gained independence in 1951, has not yet commented on Trump’s announcement.
Allegations Explained
According to Trump’s letter, Cook allegedly signed two mortgage documents within weeks of each other — one claiming a Michigan home would be her primary residence, and another declaring a Georgia property as her primary residence. These allegations surfaced last week after a letter from Trump ally and housing regulator Bill Pulte, who urged the Justice Department to investigate. Cook said she first learned about the accusations through the media and called them baseless.
Trump’s Growing Feud With the Fed
Trump has escalated tensions with the Federal Reserve, especially its chair Jerome Powell, over interest rate policy. He has repeatedly criticized Powell, even hinting at firing him, for resisting sharp cuts to borrowing rates. Cook’s removal comes as the Fed weighs potential rate cuts in September, with Powell recently suggesting that tariff-driven inflation may be temporary.
Market Reaction
The announcement rippled through global markets. The US dollar weakened in Asian trading as investors speculated that Cook’s replacement could push for more aggressive interest rate cuts — aligning with Trump’s demands.
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