Lisa Cook, a US Federal Reserve governor, has filed a lawsuit against President Donald Trump after he sought to remove her over alleged mortgage fraud. Trump claimed Cook, a Biden appointee, had misrepresented information on mortgage applications to secure favourable loan terms, and stated he no longer trusted her “integrity”. Following the announcement, the dollar briefly fell before recovering, with observers suggesting the move was intended to allow Trump to install an ally on the Fed board.
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Cook, the first Black woman on the Federal Reserve’s governing board, has consistently voted to maintain interest rates. Trump, in contrast, has repeatedly pressed the central bank to lower rates to 1 per cent. The attempt to sack Cook raised questions about the limits of presidential authority over the Fed, which operates independently to set US monetary policy.
In her lawsuit, filed on Thursday in Washington federal court, Cook argued that the claims did not constitute sufficient “cause” for removal, noting the alleged behaviour occurred before her Senate confirmation and remained unproven. Her lawyer, Abbe Lowell, described Trump’s actions as an “unprecedented and illegal attempt” to oust her, which, if permitted, would be the first instance of its kind in the Fed’s history.
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The legal challenge represents a major escalation in tensions between the White House and the Federal Reserve. Cook suggested that the attempts to remove both her and Chair Jerome Powell were part of a broader effort to seize control of the central bank. Her lawyer has requested an emergency hearing for a temporary order preventing her dismissal, while the White House has yet to comment on the filing.
