Fed's Cook has sued Trump for trying to fire her from the Fed

Federal Reserve Governor Lisa Cook has filed a lawsuit against President Donald Trump over his move to dismiss her, escalating the dispute into a legal fight that could test the limits of presidential authority over the central bank.

Cook is asking the court to invalidate Trump’s order, calling it “unlawful and void,” and has also included Fed Chair Jerome Powell as a defendant. Her suit argues that Trump’s attempt is the first of its kind and undermines the Federal Reserve Act, which specifies that a governor can only be removed “for cause.” Cook’s attorney, Abbe Lowell, wrote that unproven claims about her past mortgage filings do not meet that standard.

Trump has defended his action, saying he had “sufficient reason” to believe Cook misrepresented information on her mortgage and citing constitutional authority to remove her. The White House added that removing a governor accused of providing false financial information strengthens the Fed’s credibility and accountability. Cook, however, has maintained that “no cause exists under the law” for her removal.

The confrontation comes amid heightened political pressure on the central bank, with Trump openly criticizing the Fed for not lowering interest rates quickly enough. Because Cook sits on the board that helps set U.S. interest rates, her case carries broader implications for the Fed’s independence.

Legal experts expect the dispute to raise constitutional questions and potentially advance to the Supreme Court, marking a rare test of presidential power over the Federal Reserve’s structure and independence.