Lisa Cook Vows To Fight Trump Over "Illegal" Job Termination

President Donald Trump has fired Federal Reserve Governor, Lisa Cook, on Monday, alleging mortgage fraud from 2021, when she reportedly claimed two properties as primary residences to secure better loan terms. The unprecedented dismissal, prompted by a criminal referral from Trump ally and FHFA Director William Pulte, marks the first such action in the Fed’s 111-year history. Trump cited Cook’s “deceitful and potentially criminal” conduct as unfit for a financial regulator, invoking his constitutional authority to remove her.

Cook, the first Black woman on the Fed’s board and a Joe Biden appointee with a term until 2038, defiantly rejected the firing, asserting Trump lacks the legal power to oust her. “I will not resign and will continue my duties,” she stated through her attorney, Abbe Lowell, who promised a court challenge. The Federal Reserve Act permits governor removals only “for cause,” such as misconduct, and a recent Supreme Court ruling underscores the Fed’s unique independence, setting the stage for a major legal battle.

The firing intensifies Trump’s push to control the Fed, which he accuses of blocking economic growth by resisting sharp rate cuts. Markets reacted with a 0.3% drop in the U.S. Dollar Index, declining stock futures, and a rise in 10-year Treasury yields to 4.29%. Critics like Sen. Elizabeth Warren branded it an “authoritarian power grab,” while supporters like Sen. Rick Scott backed Trump’s accountability stance. A Trump-appointed replacement could tilt the Fed’s board, impacting imminent rate decisions amid cooling inflation and tariff concerns.

The dispute threatens the Fed’s independence, with analysts warning of eroded U.S. credibility as a global investment hub. No charges have been filed against Cook, and mortgage fraud cases are typically settled civilly. As Cook pledges to fight what she calls an illegal termination, this high-stakes clash could redefine presidential influence over the central bank and spark a landmark legal showdown.