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Fed Pushes Back on Trump’s Attempt to Fire Lisa Cook, Citing ‘Cause’ Requirement

ByHilary Ong

Sep 3, 2025

Fed Pushes Back on Trump’s Attempt to Fire Lisa Cook, Citing ‘Cause’ Requirement

The Federal Reserve said Tuesday it would follow any court decision on whether President Donald Trump has the authority to remove Governor Lisa Cook from the Board of Governors. A spokesperson noted that Cook, through her attorney Abbe Lowell, intends to challenge the action in court and seek confirmation of her ability to continue serving as a Senate-confirmed member of the central bank’s board.

The statement marked the Fed’s first response since Trump announced on Monday that he was firing Cook, citing allegations of mortgage fraud.

Legal Boundaries Under the Federal Reserve Act

While the Fed refrained from directly criticizing the president, its statement highlighted that the Federal Reserve Act grants governors long, fixed terms and allows removal only “for cause.” The Fed added that such protections are vital to ensure monetary policy decisions are guided by data, analysis, and the long-term interests of Americans rather than political pressure.

Cook has rejected Trump’s claim, saying in a statement that “no cause exists under the law” for her removal. Her attorney Lowell described the action as unlawful and confirmed that a lawsuit would be filed.

Trump’s Position and White House Defense

On Tuesday, Trump told reporters he would also abide by any court ruling on the matter but predicted he would soon have a majority of his own appointees on the Fed’s board. He has consistently pressed the central bank to cut interest rates more aggressively, something he may find easier with greater influence over the board.

White House spokesman Kush Desai defended the decision, saying the president had exercised his lawful authority under 12 U.S.C. 242 to remove a governor “for cause.” Desai pointed to allegations that Cook made false statements on mortgage documents as justification for her dismissal.

Cook’s challenge is expected to move quickly into the courts and could ultimately be decided by the Supreme Court. If the removal is upheld, Trump will have the opportunity to appoint her successor, potentially shifting the balance of the Fed’s decision-making body in his favor.

For now, the Fed reiterated its statutory mission to promote maximum employment, stable prices, and a sound financial system. “The Federal Reserve will continue to carry out its duties as established by law,” the spokesperson said.

Author’s Opinion

The firing of Lisa Cook is less about mortgage documents and more about power. The Fed’s independence has always been a guardrail against short-term political influence, and removing a governor over contested allegations weakens that guardrail. If presidents can remove central bank officials whenever their policies clash, the U.S. risks turning monetary policy into just another political tool — and that could destabilize both markets and public trust in the institution.


Featured image credit: Federalreserve via Flickr

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Hilary Ong

Hello, from one tech geek to another. Not your beloved TechCrunch writer, but a writer with an avid interest in the fast-paced tech scenes and all the latest tech mojo. I bring with me a unique take towards tech with a honed applied psychology perspective to make tech news digestible. In other words, I deliver tech news that is easy to read.

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