Fed Governor Lisa Cook Will Sue over Trump Firing/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ President Donald Trump claims he fired Federal Reserve Governor Lisa Cook, citing “cause” related to alleged financial misconduct. Cook’s legal team says Trump lacks the authority to remove her and plans to file suit. No Fed board member has ever been dismissed by a U.S. president in the institution’s history.
Fed Board Firing Controversy + Quick Looks
- Trump claims he fired Fed Governor Lisa Cook for alleged misconduct.
- Cook denies wrongdoing and refuses to step down from her post.
- Her lawyer, Abbe Lowell, will file a lawsuit challenging the dismissal.
- Trump cited “gross negligence” in a letter to justify his decision.
- Cook has not been charged with any crimes, including mortgage fraud.
- Lowell is a high-profile attorney who has represented Ivanka Trump, Jared Kushner, and Hunter Biden.
- The Federal Reserve Act only allows firing “for cause” but lacks a clear definition.
- No U.S. president has ever fired a Fed board member in the institution’s 111-year history.
Deep Look: Legal Battle Looms After Trump Tries to Fire Fed Governor Lisa Cook
Updated August 26, 2025 — President Donald Trump has sparked a major legal and constitutional controversy after claiming he has dismissed Federal Reserve Governor Lisa Cook, a move her legal team says is not within his presidential powers.
The announcement of a looming lawsuit was made by Cook’s attorney, Abbe Lowell, who has represented numerous high-profile political figures. He released a statement Tuesday, hours after Trump publicly shared a letter addressed to Cook declaring she had been fired.
“President Trump has no authority to remove Federal Reserve Governor Lisa Cook,” Lowell said. “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.”
Trump Alleges “Gross Negligence”
In his letter, Trump claimed there was “sufficient cause” to remove Cook, stating that her alleged conduct amounts to “gross negligence in financial transactions” and undermines her “competence and trustworthiness” as a financial regulator. These accusations reportedly stem from unverified claims that Cook was involved in mortgage-related misconduct — though no formal charges have been filed.
The letter appeared on Trump’s social media accounts Monday evening and was addressed directly to Cook, informing her that she was being dismissed from her role as a Federal Reserve governor.
Cook Refuses to Resign
Cook, who was appointed to the Fed’s Board of Governors in 2022, issued a firm rebuttal later the same night.
“President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” Cook stated. “I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
Earlier in the week, Cook had already pushed back against political pressure, stating she would not be “bullied to step down” and was committed to transparency in addressing any concerns regarding her record.
Legal Ambiguity Surrounds Presidential Authority Over Fed Board
At the heart of this legal fight lies a murky issue: Can a president actually fire a Federal Reserve governor?
The Federal Reserve Act says that members of the Fed’s Board of Governors can be removed “for cause,” but it provides no clear definition of what constitutes sufficient cause. Legal scholars have long debated the limits of executive authority over the independent central bank, but no president has ever tested it to this extent.
In the Federal Reserve’s 111-year history, no board member has ever been removed by a sitting or former president — making this a potentially precedent-setting event with constitutional implications.
High-Profile Attorney Takes On the Case
Cook’s attorney, Abbe Lowell, is no stranger to legal battles involving prominent political figures. He previously represented Trump’s daughter Ivanka and son-in-law Jared Kushner during inquiries into their use of private communication tools while serving in the Trump administration.
Lowell is also defending Hunter Biden in a separate legal case over tax-related charges and has represented New York Attorney General Letitia James, who is currently under investigation for mortgage-related matters.
Lowell’s involvement adds significant legal weight to Cook’s challenge and signals that the case may evolve into a broader confrontation over the limits of presidential power in managing independent agencies like the Fed.
Broader Implications for Financial Governance
The fallout from Trump’s announcement is already raising alarms across financial and political circles. Analysts warn that any perceived political interference with the Federal Reserve could undermine investor confidence and call into question the central bank’s independence — a foundational principle of modern U.S. monetary policy.
As the legal case unfolds, the financial markets and public institutions will closely watch how the courts interpret “cause” under the Federal Reserve Act and whether Trump’s claims have any legal standing.
For now, Lisa Cook remains in her post and intends to continue serving, despite mounting political pressure. The lawsuit from her legal team is expected to be filed in federal court later this week.
You must Register or Login to post a comment.