Lisa Cook lawyers up, vows to fight Fed firing

Federal Reserve Governor Lisa Cook is planning to challenge President Trump’s attempt to fire her from the central bank over allegations of mortgage fraud.

She’s also hired a high-powered lawyer, Abbe Lowell, whose client list has included Hunter Biden, ex-Sen. Robert Menendez and Ivanka Trump.

“President Trump purported to fire me ’for cause’ when no cause exists under the law, and he has no authority to do so,” Ms. Cook said. “I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”

Mr. Trump late Monday posted a letter that says he is removing Ms. Cook from the Fed, citing legal authority allowing him to remove a governor.

He pointed to evidence that Ms. Cook signed 2021 documents listing a Michigan property as her intended primary residence and then, shortly later, listed a Georgia property as her primary residence.

Mr. Trump says the documents showed evidence of mortgage fraud to obtain better loan terms, or poor judgment at best, and that Ms. Cook could not be trusted to guide monetary policy.

The Federal Reserve Act of 1913 allows presidents to fire Fed governors “for cause,” which is generally believed to mean gross misconduct, malfeasance or professional neglect — though it might be open to interpretation.

Democrats and Ms. Cook’s lawyer said Mr. Trump is using a flimsy pretext to reshape the Fed board, setting up a legal fight that could reach the Supreme Court.

“President Trump has taken to social media to once again ‘fire by tweet’ and once again his reflex to bully is flawed and his demands lack any proper process, basis or legal authority,” Mr. Lowell said. “We will take whatever actions are needed to prevent his attempted illegal action.” 

Ms. Cook is the first Black woman to sit on the Fed’s Board of Governors. President Biden nominated her to the board in 2022.

Her removal and replacement, alongside confirmation of a pending governor nominee, would give Mr. Trump a board stocked with a Trump-appointed majority.

Stock futures were down Tuesday as Mr. Trump ramped up his attacks on the Fed. For months, Mr. Trump has demanded lower interest rates from the central bank to juice his economic agenda.

Some economists and investors will get skittish if they think the Fed loses its independence and follows political dictates instead of the economic data.

“This attempted firing shreds the independence of the Fed and puts every American’s savings and mortgage at risk,” Senate Minority Leader Charles E. Schumer, New York Democrat, said. “Donald Trump is playing a dangerous game of Jenga with a key pillar of our economy. This brazen power grab must be stopped by the courts before Trump does permanent damage to national, state, and local economies.”

Others said Mr. Trump, who was convicted in 2024 of 34 counts of falsifying business records in New York, was being hypocritical.

“To the extent anyone is unfit to serve in a position of responsibility because of deceitful and potentially criminal conduct, it is the current occupant of the White House,” House Minority Leader Hakeem Jeffries, New York Democrat, said. “The American people are not buying your phony projection and slander of a distinguished public servant.”

Bill Pulte, the director of the Federal Housing Finance Agency, said the administration is simply following the facts.

“If you commit mortgage fraud in America, we will come after you, no matter who you are,” he wrote on X.

Commerce Secretary Howard Lutnick backed that view Tuesday in an interview on CNBC, saying Ms. Cook must go if the facts are not on her side.

“The real question should be, did she commit mortgage fraud, yes or no? And if you did commit mortgage fraud, please get out of the federal government,” Mr. Lutnick said. “Get out of the seat of the governor of the Federal Reserve and go away.”