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lite.cnn.com - on gopher - inofficial
ARTICLE VIEW:
Trump says he has fired Fed governor Lisa Cook. She says he has no
‘authority’ to fire her
By Elisabeth Buchwald, Bryan Mena, CNN
Updated:
12:34 PM EDT, Tue August 26, 2025
Source: CNN
President Donald Trump on Monday said he has fired Federal Reserve
Governor Lisa Cook, according to a addressed to her posted on his
social media — the first instance of a president firing a central
bank governor in the central bank’s 111-year history.
The unprecedented move represents a significant escalation of the
president’s battle against the Fed, which he has blamed for taking
too long to lower interest rates. But Cook said the president doesn’t
have the “authority” to fire her and that she plans to continue in
her post.
Cook has recently come under fire by Trump and members of his
administration for allegedly committing mortgage fraud. The Justice
Department has said it plans to investigate those allegations first
raised by Federal Housing Finance Director Bill Pulte.
Cook has not been charged with any wrongdoing.
“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
statement her attorneys shared with CNN Monday night. “I will not
resign. I will continue to carry out my duties to help the American
economy as I have been doing since 2022.”
The Fed declined to comment on the news.
It’s unclear whether Trump has the legal authority to fire Cook over
these allegations. The law specifies that a president may only remove
members of the Fed’s board “for cause” – though what merits a
for-cause firing has not been explicitly defined.
Trump, in his letter to Cook wrote, “I have determined that there is
sufficient cause to remove you from your position.”
(A of mortgage documents shows that Cook took out mortgages for two
properties, both of which were listed as her principal residence.
However, it’s not known why she did so or if she did so
intentionally.)
“In light of your deceitful and potentially criminal conduct in a
financial matter … I do not have such confidence in your integrity.
At a minimum, the conduct at issue exhibits the sort of gross
negligence in financial transactions that calls into question your
competence and trustworthiness as a financial regulator,” Trump added
in his letter.
“This is not DOJ opening anything, they haven’t charged her. So as
of right now, I think it’s kind of questionable for cause,” former
Federal prosecutor Shan Wu told CNN’s Brianna Keilar, referring to
the Department of Justice. “It’s definitely gonna get litigated.”
Appointed to the Fed board by former President Joe Biden in 2022, Cook
is the first Black woman to serve as a Fed governor.
While the firing may be challenged in courts, even going up to the
Supreme Court, Trump’s firing of Cook puts the central bank of the
world’s largest economy in uncharted waters.
For example, it’s unknown whether Cook would have to leave the
Fed’s board immediately, and if so, will Trump have the opportunity
to nominate someone else to fill her seat. Cook’s attorney, Abbe
David Lowell of Lowell & Associates, said in a statement to CNN: “We
will take whatever actions are needed to prevent his attempted illegal
action.”
The Fed’s next monetary policy meeting is less than a month away,
over September 16 and 17.
Last week Cook released a statement saying she would not be
“bullied” into resigning.
“I have no intention of being bullied to step down from my position
because of some questions raised in a tweet. I do intend to take any
questions about my financial history seriously as a member of the
Federal Reserve and so I am gathering the accurate information to
answer any legitimate questions and provide the facts,” she said in
that statement.
Fed independence at risk
The Fed is designed to be independent from politicians specifically so
it can focus on economic data – and not political considerations –
in achieving its dual mandate to keep price increases in check while
supporting the job market.
Politicians often prefer lower interest rates, aiming to boost stock
prices and make it cheaper for people to borrow money, both popular
moves among voters. But lower interest rates risk igniting price
pressures. On the other hand, leaving rates too high could overly
restrict spending and hiring, hurting the economy.
No central bank gets it right all the time. However, studies strongly
suggest that economies with independent central banks experience better
outcomes, including lower inflation.
If the move costs the US its economic credibility, American assets,
such as stocks and the dollar, could get hammered. That in turn could
leave investors to demand higher premiums to lend money to the US.
“The bigger picture is sadly simple: The Fed is designed to be
independent of politics, for very good reasons,” Alan Blinder, a
former vice chair at the Fed told CNN Monday night. “He is trying to
end that and make it an arm of the Trump administration, which will be
very bad for monetary policy if it happens.”
Senator Elizabeth Warren, the top-ranking Democrat on the Senate
Banking Committee, said in a statement that Trump’s attempt to fire
Cook is “an authoritarian power grab that blatantly violates the
Federal Reserve Act, and must be overturned in court.”
Representatives for Republican Senator Tim Scott, who leads the
committee, did not immediately respond to CNN’s request for a
comment.
Immediately following Trump’s announcement on Monday, the US dollar
index dropped by 0.3%. The index measures the strength of the dollar
against a basket of international currencies.
US stock futures, meanwhile, slid further after a day in the green. Dow
futures fell 100 points, or 0.2%. S&P 500 futures fell 0.3%. Nasdaq
100 futures slipped 0.5%.
The price of gold, which is considered a safe haven asset during times
of uncertainty, rose 0.45%.
This story has been updated with additional context and developments.
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