A day after US President Donald Trump moved to fire Federal Reserve Governor Lisa Cook, citing alleged mortgage fraud, Cook’s attorney Abbe Lowell on Tuesday announced a lawsuit to block Trump’s action, CNN reported.
“President Trump has no authority to remove Federal Reserve Governor Lisa Cook. 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,” he told the American media network.
‘No Authority’ to Fire, Says Cook’s Attorney
Lowell reiterated, “We will take whatever actions are needed to prevent [Trump’s] attempted illegal action. Cook, who had earlier asserted that she will not resign, appeared firm in her stance, reportedly saying, “I will continue to carry out my duties to help the American economy,” while pointing out that no cause exists under law for her removal.
Trump had on Monday taken to social media to announce the decision, writing in a post on his Truth Social account, “I have determined that there is sufficient cause to remove you from your position,” and adding that “the conduct at issue exhibits the sort of gross negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator.”
Cook has not been charged with any wrongdoing and flatly rejected the move.
Why This Matters More Than Politics
This is an unprecedented move by the president, departing from the norm of central bank independence. Cook is one of seven Fed governors and sits on the 12-member committee setting interest rates. Federal Reserve decisions deeply affect borrowing costs, savings yields, and wider financial conditions. Many economists have stressed that an independent Fed is crucial for stable economic policy.
According to the report, Cook voted with the majority to hold rates steady in July. Appointed by President Biden in 2022, she is the first African American woman to serve in the role.
Allegations and Market Ripples
Trump’s allegations stemmed from a public letter by Bill Pulte, who accused Cook of discrepancies in declaring her primary residence. Cook, for her part, said she only learned of the claims via the media and is gathering accurate information to respond. “I have no intention of being bullied to step down from my position because of some questions raised in a tweet,” she told the BBC.
Meanwhile, European stock markets dipped slightly as US bond yields rose, and the dollar weakened, though it later recovered.
ALSO READ: Who Is Lisa Cook? The Fed Governor Donald Trump Says He is Firing
