Lisa Cook, a governor of the Federal Reserve, has initiated a lawsuit against former President Donald Trump, following his attempt to remove her from her position. Cook’s lawsuit was filed in federal court in Washington D.C. and challenges Trump’s authority to dismiss her, which she argues undermines the independence of the Federal Reserve. A federal judge has scheduled a hearing for the case.
Trump’s attempt to terminate Cook occurred on a Monday, citing unverified claims from an associate that she misrepresented her primary residence regarding a mortgage application. In response, Cook asserted that Trump lacked the legal power to fire her and emphasized her commitment to fulfilling her responsibilities in the Fed.
Appointed by President Joe Biden in 2022, Cook is a member of the Federal Open Market Committee (FOMC), responsible for determining interest rates. Her lawsuit requests that the court annul her removal, contending that there was no valid cause for such an action. It references the Federal Reserve Act, which requires just cause for a governor’s dismissal.
Cook’s lawyers argue that the allegations against her concerning a mortgage do not constitute valid grounds for removal. They also claim that her Fifth Amendment rights were violated, as she learned of the attempt to remove her through a public post by Trump rather than an official notification.
A White House spokesperson defended Trump’s actions as legal, asserting that the former president believed there were legitimate grounds for Cook’s removal based on the allegations. The lawsuit elucidates the historical context of the Fed’s independence, suggesting that allowing the president to dismiss board members over policy disagreements would threaten that independence.
In the broader context, Trump has been critical of the Federal Reserve’s interest rate policies, advocating for cuts that have been resisted by policymakers. If successful in her lawsuit, Cook’s position would remain unchanged, preserving the board’s current balance.
Source: https://www.theguardian.com/business/2025/aug/28/fed-governor-lisa-cook-sues-trump