WASHINGTON – Federal Reserve Governor Lisa Cook has filed a lawsuit against President Donald Trump, arguing that he lacks the legal authority to remove her from her post. The case could become a landmark test of the Federal Reserve’s independence from the White House.
In her lawsuit, Cook said Trump’s August 25 announcement that he would fire her violated federal law, which permits the president to remove a Fed governor only “for cause.” She asked the court to block any steps toward her removal until the case is resolved.
Trump has accused Cook of mortgage fraud dating back to 2021, prior to her confirmation to the Fed’s Board of Governors in 2022. Cook denied the allegations and argued that even if they were true, they would not meet the legal threshold for “cause.”
“The president would not have cause to remove a Fed governor even if he had proof she jaywalked in college,” her legal team said in the filing, underscoring the high bar for dismissal.
Cook’s lawsuit also claims her constitutional right to due process was violated because she was given no notice or opportunity to respond before the attempted removal.
The case has been assigned to U.S. District Judge Jia Cobb, a Biden appointee, and may ultimately be decided by the Supreme Court. Legal experts say the outcome could have major implications for the Fed’s autonomy, as no president has ever removed a sitting Fed governor and the law has never been tested in court.
Markets reacted sharply when Trump first announced his decision, with the U.S. dollar falling against major currencies as investors worried about potential political influence over monetary policy.
Cook, appointed by Former President Biden, is the first Black woman to serve as a Federal Reserve governor.
