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40m ago

Trump Orders Removal of Fed Governor Lisa Cook, Prompting Showdown Over Central Bank Independence

Cook rejects the president’s authority to remove her under an untested 'for cause' standard.

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Lisa Cook during a Fed Listens event in Washington, DC, on March 22, 2024.
FILE - Federal Reserve Board of Governors member Lisa Cook listens during an open meeting of the Board of Governors at the Federal Reserve, June 25, 2025, in Washington. (AP Photo/Mark Schiefelbein, File)
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Overview

  • Trump posted a letter saying Cook was removed effective immediately, citing an FHFA referral alleging she claimed two primary residences in 2021 to secure favorable mortgages.
  • Cook, represented by attorney Abbe Lowell, said she will not resign and will contest the move, with legal scholars noting the statute’s procedures and scope are unsettled.
  • No president has previously sought to fire a Federal Reserve governor, a protection tied to 14‑year terms intended to insulate monetary policy from political pressure.
  • Markets reacted with a steeper U.S. Treasury yield curve as two‑year yields fell and 10‑year yields rose, while stocks opened slightly lower and the dollar weakened.
  • The mortgages predate Cook’s 2022 appointment and were disclosed in her 2024 filing, and the dispute now looms over the Fed’s Sept. 16–17 policy meeting and expectations for rate cuts.