In an unprecedented and explosive assault on the independence of the US central bank, President Donald Trump has declared he is immediately removing Federal Reserve official Lisa Cook from her position.
The move, announced in a late-night social media post, represents a dramatic escalation in his long-running war against the institution and has set the stage for an extraordinary constitutional and legal showdown.
The president claimed he had “sufficient reason” to believe Cook, the first African American woman to serve on the Fed’s board of governors, had made false statements on mortgage agreements.
He cited constitutional powers he said allowed for her ouster. The Federal Reserve itself has remained silent, leaving a vacuum of uncertainty as a political firestorm begins to rage.
An act of defiance: ‘I will not resign’
The response from Governor Cook was swift, direct, and utterly defiant. She rejected the president’s authority and made it clear she would not be forced from her post.
“President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” Cook said in a statement.
“I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022,” she added, digging in for a protracted battle.
Her lawyer, Abbe David Lowell, signaled their intent to fight the move, stating, “We will take whatever actions are needed to prevent [Trump’s] attempted illegal action.”
This extraordinary standoff threatens to pit the White House directly against the central bank, an institution that has been formally independent from the US government since 1951.
Experts suggest the administration will now face a high legal bar, potentially having to prove its case in court.
The allegations at the heart of the storm
The accusations against Cook, first made public in a letter from Trump ally and housing finance regulator Bill Pulte, center on two property documents.
According to Trump’s letter, Cook signed one document attesting that a property in Michigan would be her primary residence for the next year.
“Two weeks later, you signed another document for a property in Georgia stating that it would be your primary residence for the next year,” the president wrote. “It is inconceivable that you were not aware of your first commitment when making the second.”
Cook had previously addressed the issue last week, telling the BBC the matter stemmed from a mortgage application made four years ago, long before she joined the Fed.
She was resolute then, as she is now. “I have no intention of being bullied to step down from my position because of some questions raised in a tweet,” she said.
The war on Powell and the market’s verdict
This direct assault on a Fed governor is the culmination of years of increasing animosity from Trump towards the central bank and particularly its chair, Jerome Powell.
The president has repeatedly attacked Powell for not cutting interest rates as aggressively as he would like, calling him a “numbskull” and a “stubborn moron.”
He has also openly floated the possibility of firing the Fed chair.
The market’s reaction to this latest escalation was immediate and telling. In Asian trading on Tuesday, the US dollar weakened against major world currencies.
The investor logic was clear: the ousting of a governor, especially one perceived as more hawkish, and her likely replacement with a more compliant appointee, increases the probability of the rapid interest rate cuts the president has long demanded.
For now, the world watches as an unprecedented battle for the soul of the American economy begins to unfold.
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