The Federal Reserve governor Lisa Cook has filed a lawsuit against Donald Trump over his “unprecedented and illegal attempt” to fire her, calling it an attempt to undermine the central bank’s independence.
The lawsuit – filed by Cook in federal court in Washington on Thursday – sets the stage for a legal battle over the US president’s extraordinary push for greater control of the central bank.
A federal judge scheduled a hearing for the case on Friday at 10 am ET, with the case likely to end up at the supreme court.
Trump tried to dismiss Cook on Monday, announcing that he was removing her from her position on the Fed’s board of governors “effective immediately” over an unconfirmed allegation from one of his allies that she had obtained a mortgage on a second home she incorrectly described as her primary residence.
But Cook stood her ground, arguing that Trump had “no authority” to fire her. “I will continue to carry out my duties to help the American economy,” she said.
Cook is a member of the Federal Reserve’s board of governors, who serve in the Fed’s Federal Open Market Committee (FOMC), which votes to set interest rates. Cook was appointed to her role in 2022 by Joe Biden.
The lawsuit, filed on her behalf in Washington DC federal court, asks judges to void Cook’s firing, arguing it was not in Trump’s power to fire her and that it would be “the first of its kind in the board’s history”.
An unintentional “clerical error” might lie behind the allegations leveled by the administration, Cook’s lawyers suggest in the filing.
The complaint cites the Federal Reserve Act (FRA), noting the 1913 law that created the Fed “explicitly requires a showing of ‘cause’ for a governor’s removal”.
“An unsubstantiated allegation about private mortgage applications submitted by Governor Cook prior to her Senate confirmation is not [cause],” court filings said. “President Trump’s letter purporting to fire Governor Cook did not cite appropriate cause for removing her from the board of governors.”
Cook’s lawyers also said her removal violated her fifth amendment due process rights to a notice and hearing under the FRA. Instead of receiving official notice, Cook “found out about the attempt to remove her through President Trump’s Truth Social post”.
In a statement, a White House spokesperson, Kush Desai, argued that Trump’s removal of Cook was legal under US law and that the president “determined there was cause to remove a governor who was credibly accused of lying in financial documents from a highly sensitive position overseeing financial institutions”.
“The removal of a governor for cause improves the Federal Reserve board’s accountability and credibility for both the markets and American people,” Desai said.
The lawsuit includes a section detailing the legal and historical background of the Fed’s independence as the central bank, arguing that the “for cause” removal protections have been a “bulwark of the Federal Reserve’s independence for the past century”.
The mortgage allegations are “pretextual”, the lawsuit claims, and part of a broader attempt by Trump to obtain a vacant board seat “to fill and forward his agenda to undermine the independence of the Federal Reserve’”.
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“Allowing the president to remove members of the board over policy disagreements would also render illusory the board’s independence,” the lawsuit said. “In the few days following President Trump’s unprecedented action, media, economists and academics from across the political spectrum have sounded the alarm that his actions threaten the historic independence of the Federal Reserve.”
A representative for Cook’s lawyers declined to comment on the lawsuit.
For months, Trump has publicly urged the Fed to cut interest rates, attacking the central bank – and its chair, Jerome Powell – over its refusal to do so. Policymakers have stressed the need to wait and see the impact of the administration’s policies, such as tariffs and deportations, before approving a cut.
Cook’s exit would allow Trump to tap a replacement, helping him exert more control over Fed policy. He suggested on Tuesday that he would “have a majority” on the Fed’s seven-member board of governors “very shortly”, adding: “We have to get the rates down a little bit.”
The Trump administration has pursued several of the president’s political enemies, including the New York attorney general, Letitia James, and the California senator Adam Schiff, over claims of mortgage fraud. Both James and Schiff have denied the allegations.
Cook is not a politician, but is among a string of senior Fed policymakers who have defied Trump’s persistent calls for rate cuts. She became the first Black woman to sit on the central bank’s board when she was appointed to a term that was not due to end until 2038.
A respected economist, with stints at Harvard University and Stanford University, Cook served on the council of economic advisers under Barack Obama.
