Federal Reserve Governor Lisa Cook attends the Federal Reserve Bank of Kansas City’s 2025 Jackson Hole economic symposium, “Labor Markets in Transition: Demographics, Productivity, and Macroeconomic Policy” in Jackson Hole, Wyoming, August 23, 2025. JIM URQUHART / REUTERS
US President Donald Trump moved to fire Federal Reserve Governor Lisa Cook “effective immediately” on Monday, August 25, citing allegations of false statements on her mortgage agreements – as he expanded pressure on the independent central bank. Referring to the Federal Reserve Act as justification, Trump wrote in a letter addressed to Cook: “I have determined that there is sufficient cause to remove you from your position.”
Cook said Monday night that she would not step down. “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” she said in an emailed statement. “I will not resign.”
A US president is generally limited in their ability to remove officials from the central bank, with a Supreme Court order recently suggesting that Fed officials can only be removed for “cause,” which could be interpreted to mean malfeasance or dereliction of duty.
But the US leader pointed to a criminal referral dated August 15 from the Federal Housing Finance Agency’s director – a staunch Trump ally – to the US attorney general in his announcement that Cook would be removed from her role.
The referral, Trump said, provided “sufficient reason” to believe that Cook might have made “false statements” on one or more mortgage agreements. One of the alleged false statements was that Cook had claimed two primary residences, one in Michigan and another in Georgia.
Earlier this month, Cook said in a statement that she had “no intention of being bullied to step down,” but would take questions about her financial history seriously. In his letter on Monday, Trump said: “At a minimum, the conduct at issue exhibits the sort of gross negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator.”
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‘Authoritarian power grab’
Trump’s effort to remove Cook, the first Black woman to serve on the central bank’s board, is likely to set off a legal battle. She could be allowed to remain in her position during this period. Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, called Trump’s move “an authoritarian power grab that blatantly violates the Federal Reserve Act.” She added in a statement that this “must be overturned in court.”
Read more Subscribers only Donald Trump seriously threatens to fire Federal Reserve Chairman Jerome Powell
Trump has been ramping up pressure on the Fed this year, repeatedly criticizing its chief, Jerome Powell, for not lowering interest rates sooner despite benign inflation data. Fed policymakers have been cautious in cutting rates as they monitored the effects of Trump’s tariffs on prices.
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Trump has made no secret of his disdain for Powell, whom he has called a “numbskull” and “moron.” He also previously suggested that what he called an overly costly renovation of the Fed’s headquarters could be a reason to oust Powell, before backing off the threat.
The president’s targeting of Cook, who also sits on the Fed’s rate-setting committee, comes after his repeated broadsides against Powell while the central bank kept the benchmark lending rate unchanged.
Since its last reduction in December, the Fed has held rates at a range between 4.25% and 4.50% this year. Powell on Friday opened the door to lowering levels at the bank’s upcoming policy meeting in September.
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Cook took office as a Fed governor in May 2022 and was reappointed to the board in September 2023. She was sworn in later that same month for a term ending in 2038. She has previously served on the Council of Economic Advisers under former president Barack Obama. The Trump administration has pursued allegations of mortgage fraud against high-profile Democrats who are seen as political adversaries of the president.
