The president fired the central bank governor on Monday evening, but Cook is fighting back with a lawsuit that will likely end up at the Supreme Court.
Fed Governor Lisa Cook’s Lawsuit Against Trump to Be Reviewed Friday
“I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.” That was the defiant response of Federal Reserve Board Governor Lisa Cook in a written statement published by multiple media outlets on Tuesday, less than a day after U.S. President Donald Trump posted a letter on Truth Social, firing Cook for alleged mortgage fraud.
Cook then filed a lawsuit on Thursday against Trump, Fed Chairman Jerome Powell, and the Federal Reserve Board. The inclusion of Powell and the Fed Board appears to be a safeguard in case they too side with the president, and many expect the suit to eventually make its way to the Supreme Court.
(U.S. President Donald Trump fired Fed Governor Lisa Cook on Monday / Donald Trump on Truth Social)
The mortgage fraud allegations were originally brought forward by Bill Pulte, the Trump administration’s Director of the Federal Housing Finance Agency. It was on the back of those allegations that the president called for Cook’s resignation last week.
But by Monday evening, that call for a resignation quickly turned into an official letter of dismissal, and it appears Cook isn’t taking it lying down. The Michigan State University Economics professor is suing the president, the Fed, and even her boss, claiming that Trump has no legal basis to fire her.
“President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” Cook said in her statement. “‘For cause,’ meaning instances of inefficiency, neglect of duty, malfeasance in office, or comparable misconduct,” her lawsuit states.
The drama began when Powell and his board refused to lower interest rates, even in the face of harsh criticism and insults from the president. When Trump’s taunting proved ineffective, he targeted the controversial $2.5 billion renovation project at the Fed headquarters, which has been dogged by overruns exceeding $700 million. But Powell remained steadfast, voting to keep rates as-is, although one Fed governor, Adriana Kugler, mysteriously quit, and two others, in a rare move, broke from other board members and voted to cut rates. Kugler was quickly replaced by Trump loyalist Stephen Miran.
Soon after Miran’s nomination, Pulte drafted his now infamous letter accusing Cook of falsifying “bank documents and property records to acquire more favorable loan terms.” And now, if somehow Cook’s ouster is successful, another Trump partisan will likely replace her too, resulting in a majority pro-Trump Fed board, which would make an interest rate cut in the near future all but certain.
“This case challenges President Trump’s unprecedented and illegal attempt to remove Governor Cook from her position, which, if allowed to occur, would be the first of its kind in the Board’s history,” Cook’s lawsuit states.
