Federal Reserve Governor Lisa Cook has filed a lawsuit against former President Donald Trump after he attempted to remove her from office, setting the stage for a high-stakes legal battle with major implications for U.S. monetary policy.
Cook filed the lawsuit on Thursday in federal court in Washington, challenging Trump’s claim that he had the authority to fire her. The move came after Trump announced on Monday that he was immediately dismissing Cook over allegations that she had falsified information on mortgage applications.
The allegations were made by Bill Pulte, a Trump ally and federal housing director, who claimed Cook misrepresented two property purchases—in Michigan and Atlanta—as primary residences, a designation that can lead to more favorable mortgage terms. These claims date back to 2021, before Cook was nominated by the Biden administration for her Fed role in 2022. Her term is set to run through 2038.
No charges have been filed against Cook, and authorities have not accused her of wrongdoing. Her lawyer, Abbe Lowell, said Trump had no legal authority to remove her. “His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis,” Lowell said.
Trump’s move is the latest in a series of attacks on the Federal Reserve. The former president has repeatedly called for large interest rate cuts and has sought greater control over the central bank’s governance, including its budget and the removal of board members.
Treasury Secretary Scott Bessent commented on Tuesday that he had encouraged Fed Chair Jay Powell to undertake an internal review before the Trump administration commissioned an external one. “The Fed is an unaccountable institution and its relationship with the American people depends on a high level of trust,” Bessent said, noting that allegations like those against Cook can “puncture that trust.”
If Trump succeeds in removing Cook, it could shift the balance of power on the seven-member Federal Reserve Board, giving him a majority. Board members vote on key monetary policy decisions through the Federal Open Market Committee and oversee governance of the central bank, including regional Fed presidents’ terms.
The Federal Reserve has said it will “abide by any court decision,” with a ruling expected in the coming days.
