Federal Reserve governor Lisa Cook will file a lawsuit challenging her removal by President Donald Trump, marking a major escalation in the president's battle with the US central bank. President Trump has no authority to remove Federal Reserve Governor Lisa Cook, her lawyer Abbe David Lowell said in a statement. The president has stated there was sufficient reason to believe Cook had made false statements on her mortgage and cited constitutional powers that he claims allow him to remove her.
This unprecedented move comes as Trump has been increasing pressure on the Fed—especially its chair Jerome Powell—over what he sees as an unwillingness to lower interest rates. Cook's attorney noted that the attempt to fire her based solely on a referral letter lacks factual or legal basis, and Cook herself has emphasized that she will not be bullied into resignation, stating she will continue her duties to aid the American economy.
The controversy raises important questions about the Fed's independence from political influence, especially considering the far-reaching implications on monetary policy that affect borrowing and savings rates for Americans. Trump's removal of Cook could be viewed as an attempt to replace her with someone more amenable to his economic agenda. As the situation unfolds, experts warn that the White House may face significant legal challenges in justifying this unusual move.
This unprecedented move comes as Trump has been increasing pressure on the Fed—especially its chair Jerome Powell—over what he sees as an unwillingness to lower interest rates. Cook's attorney noted that the attempt to fire her based solely on a referral letter lacks factual or legal basis, and Cook herself has emphasized that she will not be bullied into resignation, stating she will continue her duties to aid the American economy.
The controversy raises important questions about the Fed's independence from political influence, especially considering the far-reaching implications on monetary policy that affect borrowing and savings rates for Americans. Trump's removal of Cook could be viewed as an attempt to replace her with someone more amenable to his economic agenda. As the situation unfolds, experts warn that the White House may face significant legal challenges in justifying this unusual move.
