President Donald Trump on Monday, August 25, 2025, announced he had fired Federal Reserve Governor Lisa Cook, citing alleged false statements on mortgage documents as “gross negligence” and “potentially criminal.” Cook, who has served on the Fed board since 2022, rejected the move as unlawful, insisting President Trump has no authority to remove her and pledging to challenge the action in court.
Lisa Cook’s removal marks a significant decision, as she played an integral role in the Federal Reserve since her appointment. Her departure could influence ongoing financial strategies and policies she supported during her tenure. Cook’s expertise in economics has been noted for contributing to discussions on monetary policy and financial regulation. Her perspectives have been influential in shaping the board’s approach to economic resilience and growth.
Cook and her attorney, Abbe Lowell, immediately rejected the dismissal as illegal, saying federal law does not allow the president to fire Fed board members without proven cause. “I will not resign,” Cook said in a statement, pledging to continue her duties. Lowell confirmed they will file a lawsuit challenging the removal.
The allegations stem from a referral letter by Federal Housing Finance Agency Director Bill Pulte, a President Trump ally, who claimed Cook fraudulently applied for favorable lending terms by declaring two different homes as her primary residence. Cook has denied wrongdoing and said she is gathering records to address the claims.
Legal experts note the case hinges on the definition of “for cause” removal under the Federal Reserve Act, which is rarely tested. Historically, presidents cannot fire Fed governors at will, as they are part of an independent agency designed to shield monetary policy from political interference. The Supreme Court, however, has in recent years expanded presidential removal powers for other independent agencies, though it has suggested the Fed occupies a unique position in U.S. law.
Cook’s removal comes amid President Trump’s escalating criticism of the Fed and Chair Jerome Powell, whom he has derided over high interest rates. The Fed raised rates in 2022 and 2023 to tame inflation but has held them steady in 2025, despite President Trump’s tariff-driven economic strategy that risks pushing prices higher. Powell recently hinted rate cuts may be considered soon.
If Cook is ultimately removed, President Trump could further reshape the Fed’s policymaking board. He already has three confirmed appointees—Powell, Michelle Bowman, and Christopher Waller—and is expected to nominate replacements for Cook and another Biden appointee who resigned earlier this month. That would give him a majority on the seven-member Fed board and greater sway over the Federal Open Market Committee, which sets U.S. interest rates.
Cook, confirmed in 2022 with Vice President Kamala Harris casting the tie-breaking vote, made history as the first Black woman to serve on the Federal Reserve Board. Her firing has sparked partisan reaction: Republicans like Sen. Rick Scott praised President Trump’s decision as accountability, while Democrats including Sen. Elizabeth Warren condemned it as an “authoritarian power grab” in violation of the Federal Reserve Act.