US President Donald Trump’s attempt to dismissal Federal Reserve governor Lisa Cook is expected to land in court, raising questions over the extent of presidential powers against the traditionally independent central bank.Legal experts say Trump’s claim that he can fire Cook, a Biden appointee, is legally weak but unprecedented. The Supreme Court has recently allowed presidents more authority to remove agency officials, but the Fed has never faced such a challenge.If Trump succeeds, the Fed’s political independence could be weakened, a shift economists warn may make it harder to curb inflation. Without independence, the central bank could be forced into politically driven decisions, pushing up borrowing costs for mortgages, car loans and businesses.“It’s an illegal firing, but the president’s going to argue, ‘The Constitution lets me do it,’” said Lev Menand, a Columbia University law professor and author of a book on the Fed. “And that argument’s worked in a few other cases so far this year.”Menand added that the Supreme Court could effectively set new constitutional law in this case.Cook, who joined the Fed board in 2022, is likely to seek an injunction against Trump’s order so she can continue serving. That leaves the Fed in a difficult position.“They have their own legal obligation to follow the law,” Menand said. “And that does not mean do whatever the president says. … The Fed is under an independent duty to reach its own conclusions about the legality of Lisa Cook’s removal.”Trump announced Cook’s dismissal late on Monday via a Truth Social post, claiming she was guilty of mortgage fraud.Cook immediately rejected the move, saying “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 an emailed statement. “I will not resign.”The fraud allegations were made last week by Bill Pulte, a Trump appointee at the agency regulating Fannie Mae and Freddie Mac. Pulte alleged Cook listed two primary residences, in Ann Arbor, Michigan, and Atlanta, in 2021 to secure better mortgage terms. Mortgage rates are generally higher on second homes or rentals.Cook has brought in Washington lawyer Abbe Lowell to represent her. Lowell said Trump’s “reflex to bully is flawed and his demands lack any proper process, basis or legal authority,” adding, “We will take whatever actions are needed to prevent his attempted illegal action.”Cook is the first Black woman to serve as a Federal Reserve governor. A Marshall Scholar, she studied at Oxford University and Spelman College, and has taught at Michigan State University and Harvard’s Kennedy School of Government.
