US Fed Governor Lisa Cook sues Trump over his attempt to fire her

August 28, 2025

Federal Reserve governor Lisa Cook has filed a lawsuit against President Donald Trump challenging his attempt to fire her, which she claims is "unlawful and void. " Trump alleges Cook made false statements on mortgage applications, citing this as "cause" for removal under his constitutional powers, while Cook maintains no legal cause exists. The unprecedented legal battle could have significant implications for Federal Reserve autonomy and may ultimately reach the Supreme Court.

Who is affected

Lisa Cook, Federal Reserve governor
President Donald Trump
Federal Reserve Chairman Jerome Powell (named as defendant)
The Federal Reserve Board and its autonomy
U.S. financial markets and institutions
American borrowers and savers whose finances are affected by interest rate decisions
Central banks in other countries that watch U.S. interest rate policies

What action is being taken

Lisa Cook is suing President Trump over his attempt to fire her
Cook is asking the court to declare Trump's firing order "unlawful and void"
Trump is citing constitutional powers to remove Cook based on alleged mortgage application falsehoods
The legal challenge is moving through the court system with potential to reach the Supreme Court
The Federal Reserve Board continues its normal operations including setting interest rates

Why it matters

This represents an "unprecedented" attempt to remove a Federal Reserve governor
The case challenges the independence of the Federal Reserve from political influence
It tests the legal boundaries of the Federal Reserve Act, which only allows removal "for cause"
The outcome could affect U.S. monetary policy and interest rates
It would create a precedent regarding presidential power over supposedly independent agencies
Removing Cook would allow Trump to nominate someone more aligned with his preference for lower interest rates

What's next

No explicit next steps stated in the article

Read full article from source: BBC