Trump Says He Has Fired Fed Governor Lisa Cook. She Says He Has No ‘Authority’ To Fire Her

August 26, 2025

President Donald Trump has taken the unprecedented step of firing Federal Reserve Governor Lisa Cook, claiming mortgage fraud allegations as justification, though she has not been charged with any wrongdoing. Cook has refused to resign, stating the president lacks the legal authority to remove her from her position, which she has held since being appointed by President Biden in 2022 as the first Black woman on the Fed's board. This conflict creates uncharted territory for the Federal Reserve, with legal experts questioning whether Trump has sufficient "for cause" grounds to terminate a Fed governor.

Who is affected

Federal Reserve Governor Lisa Cook
The Federal Reserve as an institution
U.S. financial markets and investors
American consumers and borrowers who are impacted by Fed policy decisions
Future Federal Reserve appointees whose independence may be compromised
The broader U.S. economy that relies on central bank independence

What action is being taken

President Trump is attempting to fire Federal Reserve Governor Lisa Cook
Cook is refusing to resign and plans to continue performing her duties
Cook's attorneys are preparing to take legal actions to prevent her removal
The Justice Department plans to investigate mortgage fraud allegations against Cook
Financial markets are reacting with initial declines in the dollar index and stock futures

Why it matters

This situation represents the first time in the Federal Reserve's 111-year history that a president has attempted to fire a governor, threatening the institution's political independence. The Fed's independence is designed to allow monetary policy decisions based on economic data rather than political considerations, with studies suggesting independent central banks produce better economic outcomes including lower inflation. If successful, Trump's action could transform the Fed into a political arm of the administration, potentially damaging U.S. economic credibility and requiring investors to demand higher premiums for lending to the U.S., according to former Fed vice chair Alan Blinder.

What's next

No explicit next steps stated in the article

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