Embattled Fed Governor Lisa Cook’s Lawyer Says She’ll Sue Trump to Keep Her Job

August 28, 2025

Federal Reserve Governor Lisa Cook has announced she will sue President Trump's administration to prevent being fired, setting up a potential Supreme Court battle over presidential authority over the Federal Reserve. Trump has moved to dismiss Cook based on allegations of mortgage fraud, claiming she improperly listed two primary residences in 2021 to secure better mortgage terms. This conflict highlights tensions over the Fed's political independence, which economists consider crucial for maintaining economic stability.

Who is affected

Federal Reserve Governor Lisa Cook
The Federal Reserve as an institution and its independence
American consumers and borrowers who could face higher long-term interest rates if Fed independence erodes
Investors who might demand higher bond yields if Fed independence weakens
Current and potential future Fed board members
Homebuyers facing high mortgage rates

What action is being taken

Lisa Cook is preparing to file a lawsuit challenging Trump's attempt to fire her
The Federal Reserve has stated it will "abide by any court decision" without explicitly criticizing Trump's action
Trump is actively attempting to establish majority control of the Fed's governing board
The Fed has deferred any decision on Cook's working status for now
Trump is continuing to criticize the Fed for maintaining relatively high interest rates around 4.3%

Why it matters

The case could redefine the limits of presidential authority over the Federal Reserve
Fed independence from politics is considered crucial for keeping long-term inflation and interest rates low
If Trump succeeds in removing Cook, it would likely erode the Fed's political independence
A less independent Fed could lead Americans to pay higher rates as investors demand higher yields
Trump could potentially gain a 4-3 majority on the Fed's board if he replaces Cook
The legal battle centers on the interpretation of "for cause" removal in the Federal Reserve Act
This is an unprecedented move that hasn't been adjudicated in courts before

What's next

No explicit next steps stated in the article beyond Cook filing the lawsuit and the courts ultimately deciding the case.

Read full article from source: The San Diego Voice & Viewpoint