Overview

• Trump posted a signed letter on Truth Social purporting to dismiss Cook, citing an FHFA referral that alleges she claimed two homes as a primary residence to secure favorable mortgages.
• Cook, the first Black woman on the Fed Board and a 2022 Biden nominee, rejected the action as unlawful, said she will not resign, and has initiated a legal challenge through attorney Abbe Lowell.
• The Federal Reserve Act allows removal only for cause, a standard not clearly defined, and legal experts anticipate a protracted court fight over whether the allegations meet that threshold.
• The Fed has largely declined public comment as procedural questions arise over Cook’s access to Fed facilities and systems, with some observers warning those decisions could draw further White House pressure on Chair Jerome Powell.
• Markets showed caution following the announcement, with European stocks lower, U.S. equities soft, and selling in longer-dated Treasurys reflecting concern about Fed independence and policy credibility.