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Sunday, Aug 31, 2025
Outside the box.
Trump Challenges Fed Governor Lisa Cook in Historic Fight Over Presidential Authority
Governor Cook vows to contest her dismissal, as Trump cites constitutional power and positions the case for a Supreme Court showdown.
President Donald Trump has moved to dismiss Federal Reserve Governor Lisa Cook, triggering a legal and political confrontation that could reach the Supreme Court.
Cook, appointed in 2022 to a term expiring in 2038, was accused by Trump of mortgage fraud, alleging she listed two properties as her primary residence to secure favorable loan rates.
She has denied the allegations and maintains that the president has no authority to remove her.
In response, she has announced plans to sue to retain her position.
On Monday, Trump invoked Article II of the Constitution and the Federal Reserve Act of 1913, asserting his authority to remove a governor for cause.
Cook rejected the claim, arguing no valid cause exists for her dismissal.
The dispute is expected to test the limits of presidential power over the central bank.
Legal observers note that past Supreme Court rulings have allowed presidents to remove certain independent-agency officials but that the Federal Reserve’s unique hybrid structure may warrant distinct consideration.
Justice Elena Kagan has previously dissented in cases involving removal powers, signaling that the Court may be divided on the issue.
The confrontation comes as Trump seeks to reshape the Fed’s leadership.
His nomination of economist Stephen Miran to the Board of Governors highlights an effort to align monetary policy more closely with White House priorities.
Financial markets have already reacted to the uncertainty, with Treasury yields rising and the U.S. dollar weakening amid concerns about the central bank’s independence.
The outcome of the case could determine not only Cook’s future but also the broader balance of power between the executive branch and the Federal Reserve, with significant implications for U.S. economic governance.
Cook, appointed in 2022 to a term expiring in 2038, was accused by Trump of mortgage fraud, alleging she listed two properties as her primary residence to secure favorable loan rates.
She has denied the allegations and maintains that the president has no authority to remove her.
In response, she has announced plans to sue to retain her position.
On Monday, Trump invoked Article II of the Constitution and the Federal Reserve Act of 1913, asserting his authority to remove a governor for cause.
Cook rejected the claim, arguing no valid cause exists for her dismissal.
The dispute is expected to test the limits of presidential power over the central bank.
Legal observers note that past Supreme Court rulings have allowed presidents to remove certain independent-agency officials but that the Federal Reserve’s unique hybrid structure may warrant distinct consideration.
Justice Elena Kagan has previously dissented in cases involving removal powers, signaling that the Court may be divided on the issue.
The confrontation comes as Trump seeks to reshape the Fed’s leadership.
His nomination of economist Stephen Miran to the Board of Governors highlights an effort to align monetary policy more closely with White House priorities.
Financial markets have already reacted to the uncertainty, with Treasury yields rising and the U.S. dollar weakening amid concerns about the central bank’s independence.
The outcome of the case could determine not only Cook’s future but also the broader balance of power between the executive branch and the Federal Reserve, with significant implications for U.S. economic governance.
