President Donald Trump announced late Monday that he had fired Federal Reserve Governor Lisa Cook, accusing her of “deceitful and potentially criminal conduct” tied to mortgage fraud claims. Trump said the dismissal was “for cause,” asserting authority under the Constitution and the Federal Reserve Act.
Cook, through her attorneys, immediately disputed the allegations and Trump’s legal authority.
“President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” she said. “I will not resign.”
Mediaite digs deeper into the impasse at the top levels of the U.S. government:
In a letter to Cook dated Monday, Trump wrote that “you are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately.” The president claimed that he was removing Cook “for cause.” The Trump administration alleges that Cook may have falsified records to receive more favorable terms on a mortgage. Cook, who is the first Black woman to serve on the Board of Governors, has not been charged with a crime.
“The American people must be able to have full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve,” Trump wrote. “In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity.”
The president has feuded with Federal Reserve Chairman Jerome Powell, who has resisted Trump’s calls to lower interest rates. Although Trump has reportedly toyed with the idea of attempting to remove Powell, the president appears poised to take no action, as Powell’s term ends in May.
Federal Reserve governors serve 14-year terms and can only be removed “for cause,” a vague standard traditionally interpreted to mean serious misconduct or inability to perform duties. Legal scholars say actions predating a governor’s appointment typically don’t qualify.
The move set off alarm across legal and economic circles Tuesday, with critics warning it could undermine the central bank’s political independence. The dispute is expected to escalate — potentially reaching the Supreme Court, as Mediaite notes:
Trump’s attempt to fire Cook may very well be on a collision course with a recent Supreme Court ruling from May. In that case, Trump v. Wilcox, the court ruled that the president could remove two members from their respective government boards, the National Labor Relations Board and the Merit Systems Protection Board. However, the court suggested that the president does not have the authority to remove Federal Reserve board members.
“The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” the court declared at the time.
If upheld, Cook’s removal would open the door for Trump to reshape the Fed’s board and accelerate policy shifts — including possible steep interest rate cuts.
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Awwww. She might have to look for a job in the real world.
But I thought “No one is above the law”.