Federal Reserve Governor Lisa Cook will be filing a lawsuit to prevent her firing by President Donald Trump, according to a lawyer hired by the central bank official.
No ‘Factual or Legal Basis’
“His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis. We will be filing a lawsuit challenging this illegal action,” said Cook’s lawyer, Abbe Lowell, according to a Reuters report.
This comes a day after Trump shared a letter addressed to Cook in a Truth Social post on Tuesday, firing her for alleged mortgage fraud. Trump accused Lisa of “deceitful and potentially criminal conduct” related to mortgages she obtained in 2021.
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Trump noted in his letter that Cook had signed a document attesting that a property in Michigan would be her primary residence for the next year, before signing another in Georgia just two weeks later. This was based on a “criminal referral” from William J. Pulte, director of the Federal Housing Finance Agency, to U.S. Attorney General Pamela Bondi.
Trump told reporters on Tuesday, “We need people that are 100% above board and it doesn't seem like she was,” adding he had “good people” in mind as replacements, but said that he would accept a court ruling that kept Cook in her position.
This is an unprecedented move in the 111-year history of the Federal Reserve, whose governors serve 14-year terms to shield policy decisions from political pressure.
The Fed has since responded, stating that Cook’s status remains unchanged. “Board members serve 14-year tenures and cannot be removed easily from office, in order to ensure that monetary policy decisions are based on economic data and the long-term interests of the American people,” the bank said in a statement.
Trump Eyes Full Overhaul of The Fed
Macro strategist Craig Shapiro believes Cook’s removal could hand Trump a rare majority in the Federal Open Market Committee, which makes interest rate decisions.
Shapiro says Trump can now appoint two more governors, establishing a 4-3 majority on the board, which he says can be expanded to 5-2, following the end of Fed Chair Jerome Powell’s term.
This majority, he says, “could stop regional Fed presidents from being reappointed,” or “open up the process for the next Fed chair to replace existing Fed Regional presidents in the second half of 2026.”
Sen. Elizabeth Warren (D-Mass.) has criticized Trump’s move to oust Cook, describing it as an “authoritarian power grab,” while adding that “…any court that follows the law will overturn it.”
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