Trump Move to Fire Fed's Cook 'Uncharted Waters,' Says Richards

Kitty Richards, senior fellow at Groundwork Collaborative, reacts to President Trump's attempt to oust Fed governor Lisa Cook from her seat on the Fed board and breaks down the larger-scale impact the move could have on the economy.

Federal Reserve Governor Lisa Cook vowed to fight President Donald Trump’s move to oust her from the central bank following allegations that she falsified mortgage documents.

“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,” Cook’s lawyer, Abbe Lowell, said in a statement. Previously, Cook said she would “carry out my duties to help the American economy as I have been doing since 2022.”

Cook’s challenge of Trump’s removal effort throws the future of the central bank’s board into further question after the president’s move Monday night, which represented a dramatic escalation in his battle for more control over monetary policy.

In a letter posted on Truth Social late Monday, Trump said he had “sufficient cause” to fire Cook, the first Black woman to serve on the Fed Board of Governors in Washington, based on the allegations from a White House ally that she made false statements on one or more mortgage loans.

The move, which prompted losses for long-dated US Treasuries in Tuesday trading, could give Trump another chance to name someone to the Fed board as he repeatedly pressures officials to lower interest rates.

“We’ll have a majority, very shortly so that’ll be great once we have a majority, and housing is going to swing and it’s going to be great,” Trump said.

He floated the possibility he could shift Council of Economic Advisers Chairman Stephen Miran — whom he nominated to fill a vacant board seat with a term expiring in January — to the seat held by Cook, with a term running until 2038.

“We’ll see what happens. Look, we just put a very good man in one position, we switch him to the longer term and pick somebody else. But we’re very happy with the person we have in there,” the president told reporters.

Trump’s remarks were the latest signal he had no intention to back down from a fight that has sparked backlash over concerns it could threaten the independence of the central bank — a bedrock assumption of US markets that underpins the nation’s credit ratings.

Cook said in a statement that Trump did not have any authority to fire her and that she would not resign. Abbe Lowell, her lawyer, said Cook intends to file a lawsuit challenging her firing.

“I will continue to carry out my duties to help the American economy as I have been doing since 2022,” Cook said.

Trump’s effort to fire Cook — the first Black woman to serve on the Board of Governors in Washington — dramatically escalates his effort to exert more control over the US central bank and sets up a legal challenge that could have major impacts on monetary policy.

If Trump succeeds in removing and replacing Cook, it provides the president, who has aggressively advocated for interest rate cuts and expressed frustration with Fed Chair Jerome Powell over his approach, a four-person majority on the Fed’s seven-member board.

--------

Watch Bloomberg Radio LIVE on YouTube

Weekdays 7am-6pm ET

Follow us on X

Subscribe to our Podcasts:

Bloomberg Daybreak

Bloomberg Surveillance

Bloomberg Intelligence

Balance of Power

Bloomberg Businessweek

Listen on Apple CarPlay and Android Auto with the Bloomberg Business app:

Apple CarPlay

Android Auto

Visit our YouTube channels:

Bloomberg Podcasts

Bloomberg Television

Bloomberg Originals