Federal Reserve Governor Lisa Cook has announced her intention to sue President Donald Trump after he attempted to remove her from her position on the Federal Reserve Board. In a letter on Truth Social, Trump claimed to dismiss Cook “effective immediately” due to allegations of mortgage fraud, accusing her of misrepresenting properties in Michigan and Georgia as primary residences to secure better loan terms—actions taken before her appointment.
Cook, the first Black woman on the Federal Reserve Board, has denied any wrongdoing. She stated that Trump’s assertion of firing her “for cause” is unfounded, asserting that he lacks legal authority for such a dismissal. Cook intends to continue her duties in support of the American economy, emphasizing her commitment to the role.
To contest her removal, Cook has enlisted prominent attorney Abbe Lowell, who argues that the president cannot dismiss a Federal Reserve governor without just cause, calling Trump’s attempt “baseless.” According to the Federal Reserve Act, governors serve fixed terms and can only be removed by the president for cause, safeguarding the central bank’s independence from political interference.
The case has attracted political reactions, with House Democratic Leader Hakeem Jeffries criticizing Trump’s actions as lacking credible evidence. The Congressional Black Caucus described the dismissal as “racist, misogynistic, and unlawful,” underscoring the significance of Cook’s historic appointment.
As legal proceedings commence, financial markets are watching closely, as undermining the Federal Reserve’s independence could affect U.S. monetary policy and economic stability. The outcome may significantly impact the balance of power between the executive branch and independent federal agencies.
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