Federal Reserve Governor Lisa Cook, who was dismissed by President Donald Trump on Monday, is planning to sue over her firing.
"President Trump has no authority to remove Federal Reserve Governor Lisa Cook," Cook's attorney said in a statement obtained by Scripps News. "His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis. We will be filing a lawsuit challenging this illegal action.”
ADDITIONAL REPORTING | What is the Federal Reserve's role in shaping US monetary policy?
In a letter addressed to Cook and posted on social media, President Trump said his decision to remove her from her position is in connection to allegations of mortgage fraud. The White House claims Cook committed fraud in 2021 when she purchased two properties.
"The Federal Reserve Act provides that you may be removed, at my discretion, for cause. See 12 U.S.C. § 242," President Trump wrote. "I have determined that there is sufficient cause to remove you from your position."
“The executive power of the United States is vested to me as President and, as President, I have a solemn duty that the laws of the United States are faithfully enacted," he added. "I have determined that faithfully enacting the law requires your immediate removal from office.”
Cook has not been legally charged with any such fraud offense. She said at the time the allegations surfaced that she would not be "bullied" into resignation.
WATCH | Scripps News speaks with Kevin Hassett, director of the National Economic Council, on Trump's firing of Cook
Cook has suggested that she could stay on the Federal Reserve as she fights her dismissal.
"President Trump purported to fire me 'for cause' when no cause exists under the law, and he has no authority to do so," she said in a statement. "I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022."
Sen. Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, said in a statement Monday “The illegal attempt to fire Lisa Cook is the latest example of a desperate President searching for a scapegoat to cover for his own failure to lower costs for Americans. It’s an authoritarian power grab that blatantly violates the Federal Reserve Act, and must be overturned in court.”
IN RELATED NEWS | Fed Chair Powell under fire from Trump ahead of tense Jackson Hole address
The news of Cook's ouster comes as President Trump has maintained heavy pressure on the independent Federal Reserve and its Chairman Jerome Powell to lower interest rates.
The president has at times insulted Powell and threatened to remove him from his position. This month President Trump called Powell a "stubborn MORON" on social media and urged the rest of the Fed's Board of Governors to exert more control over Fed decisions.
At its most recent meeting, the Federal Reserve left the federal funds rate unchanged at a range of 4.25% to 4.50%, where it has remained since December 2024.
"Once we have a majority, housing is going to swing, and it's going to be great," Trump said during a cabinet meeting Tuesday. "People are paying too high an interest rate. That's the only problem with housing. We have to get the rates down a little bit. And when we do, it's gonna be a tremendous difference. The country is doing so well. It sort of, it sort of blows through the fact that we have a man who's too late and not doing a very good job."
RELATED STORY | Millions want to own but can't: What's being done to address the housing crisis?
Trump’s public comments are notable towards an agency that is historically independent from the White House. One of Trump’s top economic advisors, meanwhile, maintained that the Federal Reserve is independent.
“Yes, 100% the Federal Reserve should be an independent agency, entity," said Kevin Hassett, the director of the National Economic Council. "The President strongly believes in that, but he also believes that the Fed has made a series of very serious policy errors, first allowing inflation to get out of control, and then now not lowering interest rates when inflation is much more in control And so he's got a policy difference with the Fed. And I think that you know this is exactly what a democracy is about, is having policy debates about what we should be doing."
“I think that it's the duty of the Fed to do what they think is right," Hassett added. "And I guess to the extent that one would be disappointed in their actions, you can sort of say that they haven't studied their errors and tried to correct them, and that disappoints. I think all of us, especially the Americans, have suffered from a high inflation."
