Federal Reserve Governor Lisa Cook has firmly rejected President Donald Trump’s attempts to remove her from her position, warning that his administration lacks legal grounds to fire her. The ongoing dispute highlights growing concerns over threats to the central bank’s independence.
Published On 27 Aug 2026
Cook’s legal team has responded to renewed efforts by the Trump administration to push her out of her leadership role at the Federal Reserve, actions widely viewed as an attempt to undermine the bank’s autonomy.
Under U.S. law, Federal Reserve governors can only be removed “for cause” and not for political reasons. President Trump has accused Cook, a Democratic appointee, of mortgage fraud in an effort to meet this legal threshold. However, Cook’s attorneys, Abbe David Lowell and Norman Eisen, issued a detailed rebuttal on Wednesday, directly challenging the president’s allegations.
“For the second time in a year, we have explained why there is no legal basis for President Trump to remove Governor Cook for cause,” the lawyers stated. “An inadvertent error is not fraud, as the President and a third of his cabinet should know, because they reportedly did the same thing. These attacks on Governor Cook are not about real estate paperwork; they are an attempt by President Trump to force the Federal Reserve to bend to his will.”
The legal response comes after the White House issued a formal threat earlier this month. In an August 5 letter, the administration warned that Trump was considering firing Cook “due to there being sufficient reason to believe that you made false statements on one or more mortgage agreements.” She was given three weeks to respond.
This marks the second instance in which Trump has pursued mortgage fraud allegations against Cook in an attempt to remove her. A similar effort occurred in August 2025, when Trump publicly stated, “I’ll fire her if she doesn’t resign.” Cook retaliated with a lawsuit that ultimately reached the Supreme Court.
She argued that the allegations were merely a pretext for her removal due to policy disagreements. In a 5-4 ruling in June, the Supreme Court blocked Trump’s attempt to dismiss Federal Reserve governors at will.
No sitting president has previously attempted to remove a Federal Reserve official since the institution’s founding over a century ago. The Federal Reserve Act of 1913 established safeguards intended to protect the bank from external pressures that might otherwise compromise economic stability for political advantage.
Nevertheless, Trump has actively sought to expand executive authority during his second term, with the Federal Reserve emerging as a key target. He has repeatedly pressured the bank to lower interest rates more rapidly, despite their elevation being a strategic measure to combat inflation.
Economic experts caution that reducing interest rates too quickly could flood U.S. markets with liquidity, potentially weakening the dollar’s value. This issue became particularly contentious during the tenure of former Fed Chair Jerome Powell, whose leadership concluded in May. Powell continues to serve as a Fed governor.
In January, Powell disclosed that the Trump administration had launched a criminal investigation into his conduct related to a renovation project at the Fed’s headquarters. He dismissed the probe as an intimidation strategy, emphasizing, “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions – or whether, instead, monetary policy will be directed by political pressure or intimidation.”
In March, a federal judge dismissed two subpoenas tied to the investigation, characterizing them as a thinly veiled effort to pressure Powell out of his role. The inquiry was officially dropped in April, shortly before Powell’s term as chair expired.
