Overview

• The Federal Reserve said it will abide by any court decision and noted governors can be removed only 'for cause,' as Lisa Cook, through attorney Abbe Lowell, prepares a court challenge likely seeking an injunction to remain in her post.
• The White House defended President Trump's authority to act and pressed Cook to take leave, with economic adviser Kevin Hassett calling it the 'honorable' move and Treasury Secretary Scott Bessent urging an internal Fed review.
• The allegations stem from FHFA director Bill Pulte’s referral claiming Cook declared two primary residences on past mortgages; the Department of Justice has opened an inquiry, and no criminal charges have been filed.
• Legal analysts say the dispute could yield fast rulings and potentially reach the Supreme Court, setting precedent on presidential power over the Fed and the meaning of 'for cause' removal protections.
• The outcome could reshape the Fed’s Board of Governors balance, as Trump says he intends to name a replacement and former Fed chair Janet Yellen warned the attempt threatens central-bank independence and market credibility.