US Federal Reserve governor Lisa Cook on Tuesday rejected President Donald Trump’s announcement that he was removing her from the central bank, insisting he has no authority to do so and vowing not to resign.Donald Trump posted a letter on his Truth Social platform declaring Cook’s dismissal effective immediately, citing allegations of mortgage fraud. Cook swiftly responded: “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so. I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”The president’s letter accused Cook of claiming two primary residences in Michigan and Georgia in 2021 to obtain better mortgage terms, an allegation first raised by Bill Pulte, a Trump appointee to the Federal Housing Finance Agency. “In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity,” Trump wrote.The move marks the first time a US president has attempted to remove a sitting Fed governor, raising the prospect of a lengthy legal battle that could reach the Supreme Court and unsettle financial markets. Legal scholars stressed that Fed governors serve staggered 14-year terms precisely to shield the institution from political interference, and can only be removed for narrowly defined “cause.” The independence of the Federal Reserve is seen as vital to maintaining market confidence and controlling inflation. Any direct challenge to that autonomy could push up borrowing costs if investors begin to doubt the Fed’s ability to act free from political pressure.“This effort to fire a sitting Federal Reserve Governor is part of a concerted effort to transform the financial regulators from independent watchdogs into obedient lapdogs that do as they’re told. This could have real consequences for Americans feeling the squeeze from higher prices,” said Rohit Chopra, former director of the Consumer Financial Protection Bureau.Trump has long pressured the Fed to cut interest rates and repeatedly criticised Chair Jerome Powell, whose term ends in 2026. Forcing Cook out would open a seat on the seven-member board, potentially giving Trump a chance to appoint an ally aligned with his push for lower rates.No president has previously tried to oust a Fed governor. While Richard Nixon and Lyndon Johnson sought to influence the Fed behind closed doors, they stopped short of direct confrontation that would undermine the bank’s independence.
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