Trump Claims He Fired Fed Governor Lisa Cook
President Donald Trump announced he is removing Federal Reserve Board Governor Lisa Cook, citing alleged false statements on mortgage applications. The move marks an unprecedented challenge to Fed independence. Trump has repeatedly criticized the central bank for not lowering interest rates, raising concerns about political interference.
Cook, the first Black woman to serve as a Fed governor, rejected the termination. “President Trump has no authority to fire me,” she said, hiring attorney Abbe Lowell to defend her legal rights.
Allegations Behind Trump’s Move
In a Truth Social post, Trump cited claims from Federal Housing Finance Agency Director Bill Pulte that Cook provided misleading information on multiple mortgage agreements. Trump’s letter referenced Cook signing conflicting primary residence documents for properties in Michigan and Georgia.
Trump wrote, “The conduct raises questions about her competence and trustworthiness as a financial regulator.” He framed the action as protecting public confidence in financial oversight.
Cook Vows to Stay in Office
Cook stated, “I will not resign and will continue fulfilling my duties to support the American economy.” She emphasized her ongoing commitment since her 2022 appointment by President Joe Biden.
Attorney Abbe Lowell criticized Trump’s action as illegal and lacking proper legal basis. “We will take all necessary steps to prevent this attempted illegal firing,” Lowell said.
Legal and Historical Context
Under the Federal Reserve Act of 1913, a president can only remove a Fed governor “for cause,” traditionally interpreted as malfeasance or dereliction of duty. Experts note Trump’s attempt could face federal court challenges, and the Supreme Court might eventually decide its legality.
If upheld, Trump could appoint a replacement, potentially shifting the board’s balance to favor his nominees. Currently, two Trump appointees, Christopher Waller and Michelle Bowman, serve alongside Chair Jerome Powell.
Political Reactions and Market Implications
Senator Elizabeth Warren called the firing attempt an “authoritarian power grab” violating the Federal Reserve Act. Analysts warn markets could react negatively, increasing uncertainty over monetary policy. Edward Mills of Raymond James described the move as “unprecedented for central bank independence.”
Markets already responded: the U.S. Dollar Index dropped 0.3%, the 2-year Treasury yield fell four basis points, and gold futures rose 0.3% after Trump’s announcement.
Potential Board Reshaping
If Cook is removed, Trump could nominate her successor, solidifying a 4-to-3 majority of his appointees on the Fed board. The board, along with regional presidents, influences key interest rates, including rates on reserves held by banks.
Powell, after months of resisting pressure from Trump, recently signaled that interest rate cuts “may warrant” careful consideration. Trump’s move intensifies scrutiny over the Fed’s independence and the potential politicization of monetary policy.
What Comes Next
Trump’s firing of Cook could trigger prolonged legal battles and affect market stability. Confirmation of a new Fed governor would reshape U.S. monetary policy for years, especially amid inflation concerns and interest rate decisions.
Stay tuned to Maple Wire for the latest updates on the Fed, Trump, and U.S. economic developments.
