 "Trump has ‘no authority’ to fire: Fed governor Lisa Cook says ‘will continue to carry out my duties’")
US President Donald Trump on Monday announced he was firing Federal Reserve Governor Lisa Cook over alleged issues with mortgage loans, a move that could test the limits of presidential authority over the independent central bank. In a letter to Cook — the first African-American woman on the Fed’s board — Trump said he had “sufficient cause to remove you from your position” because in 2021 she indicated on documents for separate Michigan and Georgia mortgages that both were primary residences.
Cook’s term on the Fed runs until 2038, and while the Federal Reserve Act allows removal “for cause,” no president has ever challenged this since the 1970s, when a hands-off approach became the norm to maintain confidence in US monetary policy.
Legal experts say a challenge could raise complex questions about executive power, the Fed’s quasi-private structure, and whether Cook’s past mortgage actions truly constitute cause for removal. Peter Conti-Brown, a Fed historian at the University of Pennsylvania, noted that the mortgages predated her appointment and were public during Senate vetting.
“These officials have been vetted by our President and our Senate… the idea that you can then reach back, turn the clock backward and say all these things now constitute fireable offences is incongruous with the entire concept of ‘for cause’ removal,” Conti-Brown said.
Trump accused Cook of “deceitful and criminal conduct in a financial matter” and said he did not trust her “integrity.”
“At a minimum, the conduct at issue exhibits the sort of negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator,” he said, citing Article 2 of the Constitution and the 1913 Federal Reserve Act as authority for the firing, which he said was “effective immediately.”
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View AllThe announcement roiled markets: short-term Treasury yields fell while longer-term yields rose, reflecting expectations that the Fed might ease rates despite ongoing inflation risks. Economists note that political interference in central bank decisions can undermine inflation management, a principle long upheld at the Fed.
“It speaks to the determination of this administration to remake the Federal Reserve and serves as a warning to the other Biden appointees. The Fed as an institution escaped harm in the first Trump Administration, and will not be so fortunate this time around,” said Tim Duy of SGH Macro Advisors.
Trump has repeatedly criticised Fed Chair Jerome Powell for not lowering interest rates but had not pursued firing him. Instead, Cook became the target, allowing Trump a potential fourth appointment to the Fed’s seven-member board, alongside existing governors Christopher Waller and the Vice Chair for Supervision, plus a pending nominee to an open seat.
The mortgage issues in question date back to 2021, when Cook was an academic. She held three mortgages in 2024 disclosures, with two listed as primary residences, which generally carry lower rates than investment property loans.
Observers say the move also fits a broader pattern in the Trump administration of challenging diversity and equity programmes in government and targeting political opponents, including Senator Adam Schiff, with similar allegations.
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