Fed Governor Lisa Cook Sues Trump Administration Over Firing Attempt in Historic Legal Clash

In a first-of-its-kind confrontation over central bank independence, Federal Reserve Governor Lisa Cook has filed suit against the Trump administration after the president announced her removal over unproven allegations of mortgage fraud.

The lawsuit, lodged late Tuesday, seeks an emergency injunction to block her dismissal and reaffirm her position on the Fed’s Board of Governors. If successful, the case could set a precedent limiting presidential power over the central bank. If not, it could mark the collapse of the Fed’s 112-year tradition of political independence.

President Trump claimed on Truth Social that Cook committed mortgage fraud in 2021, before her Senate confirmation. Cook has not been charged with any crime. Her legal team, led by Abbe David Lowell, argues the allegations are baseless and politically motivated, accusing the White House of trying to remove her for resisting Trump’s push for deeper interest rate cuts.

Economists warn the stakes are high. The Fed’s independence allows it to pursue policies like raising rates to curb inflation even when politically unpopular. A White House-controlled Fed, analysts argue, could artificially suppress rates to satisfy Trump’s demands, stoking inflation and rattling investor confidence.

“If Cook wins, stability is preserved,” said Fed historian Peter Conti-Brown of the University of Pennsylvania. “If she loses, that’s the end of Fed independence as we know it.”

The case has been assigned to Judge Jia Cobb, with a hearing set for Friday. Most observers expect the battle to reach the Supreme Court, which has previously said presidents may remove Fed officials only “for cause,” not over policy disputes.

Cook, the first Black woman to serve as a Fed governor, is a former Marshall Scholar with degrees from Oxford and Spelman College. Her removal would reshape the Fed’s board dynamics, potentially giving Trump a 4–3 majority as he seeks to stack the institution with loyalists.

The outcome will not only determine Cook’s future but also test the durability of one of the cornerstones of modern U.S. economic governance.