President Donald Trump moved to fire Federal Reserve Governor Lisa Cook on Monday, August 25, 2025, marking an unprecedented attempt to remove a sitting Fed governor in the central bank’s 112-year history. The action targets Cook, the first Black woman to serve on the Federal Reserve Board of Governors, over allegations of mortgage fraud.
Trump announced the firing in a termination letter posted on Truth Social, citing claims by Federal Housing Finance Agency Director Bill Pulte that Cook made false statements on mortgage applications. The president wrote that there was sufficient reason to believe Cook had made false statements on one or more mortgage agreements, specifically alleging she signed documents for properties in Michigan and Georgia within two weeks of each other, both claiming primary residence status.
Cook immediately rejected the firing, stating Trump had no authority to remove her and that no cause existed under the law. Cook declared “I will not resign” and indicated she would continue carrying out her duties to help the American economy as she had been doing since 2022. She hired high-profile attorney Abbe Lowell to challenge her purported termination.
Lowell announced Tuesday that Cook would file a lawsuit challenging the illegal action, arguing that Trump’s attempt to fire her lacked any factual or legal basis. The attorney characterized the move as another example of Trump’s reflex to bully, stating the demands lacked proper process, basis, or legal authority.
The Federal Reserve responded with a pointed statement emphasizing that Congress, through the Federal Reserve Act, directs that governors serve in long, fixed terms and may be removed by the president only “for cause.” The central bank noted that long tenures and removal protections serve as vital safeguards, ensuring monetary policy decisions are based on data, economic analysis, and the long-term interests of the American people.
The allegations against Cook originated from Pulte, who sent a criminal referral to the Justice Department last week. Pulte claimed Cook committed mortgage fraud by claiming multiple primary residences on her mortgage applications. The Justice Department announced it would investigate Cook four days before Trump’s termination letter.
Cook told the BBC last week that she learned of the allegations from media reports and that the matter stemmed from a mortgage loan application she made four years ago, before joining the central bank. She indicated she was gathering accurate information to answer legitimate questions and provide facts, while expressing her intention not to be bullied into stepping down from her position.
Democratic lawmakers strongly condemned Trump’s action as unconstitutional and authoritarian. Senate Democratic Leader Chuck Schumer characterized the move as a brazen power grab that shreds Fed independence and puts Americans’ savings and mortgages at risk. House Democratic Leader Hakeem Jeffries described it as a baseless attack on Cook, emphasizing her historic role as the first Black woman to serve on the Federal Reserve Board of Governors.
Senator Elizabeth Warren called the attempt an illegal authoritarian power grab that blatantly violates the Federal Reserve Act and must be overturned in court. Representative Maxine Waters, the ranking Democrat on the House Financial Services Committee, warned that removing Cook without legitimate cause was unconstitutional and predicted it would not stand in court.
Financial experts expressed concern about the threat to Federal Reserve independence. Edward Mills of Raymond James noted the move marked an unprecedented moment for central bank independence, signaling the White House’s escalating campaign to exert direct influence over monetary policy decisions. He predicted markets would view the attack on Fed independence negatively, amplifying uncertainty over future policy direction.
The attempted firing comes amid Trump’s broader pressure campaign against the Federal Reserve over interest rates. Trump has repeatedly demanded the Fed cut rates and has threatened to fire Fed Chair Jerome Powell. If successful in replacing Cook, Trump’s appointees would comprise a majority of the Fed board, granting him significant influence over the agency responsible for setting interest rates.
On Tuesday, Trump told reporters he had several good people in mind to replace Cook, suggesting he might have somebody he liked for the position. Commerce Secretary Howard Lutnick supported the removal, arguing that if Cook committed mortgage fraud, she should leave the Fed board respectfully.
Cook was appointed by former President Joe Biden in 2022 and her term was set to expire in 2038. The Supreme Court may ultimately rule on whether her firing is legal, as federal law allows presidents to remove Fed board members only “for cause,” though no precedent exists for such an ouster.
