Trump’s decision to ignore Lisa Cook from the Federal Reserve board puts politics with one of Washington’s most armored institutions.
Donald Trump has, as always, made the decision public with a social message that has transformed a dispute into alleged irregularities in mortgages into a challenge open to the independence of the central bank.
Here legal dossiers intertwine, possible repercussions on global markets and the principle, more than ever discussed, of the autonomy of the Fed, a cornerstone that since the 1950s has guaranteed trust and stability to American monetary policy.
And there is more. In fact, a presidential announcement is not enough to hunt a member of the Fed: the law allows removal only in the presence of a “just cause”, a concept never tested in court. For this reason, the story opens a delicate legal front.
Because Trump would like to fire Lisa Cook
Donald Trump has announced that he has decided to have the immediate removal of Lisa Cook from the Board of the Federal Reserve. He chose his favorite megaphone, the Truth Social platform, where he published the letter.
Here, Trump spoke of “sufficient reasons” linked to real estate practices considered irregular.
He mentioned two mortgages from 2021, one in Michigan and the other in Georgia, both presented as the main residence. For Trump, this double declaration would be enough to question the reliability of Cook as a financial regulator.
The story was fueled by a document released by Bill Pulte, a man of finance linked to Trump and head of a credit surveillance agency. In that letter, Pulte spoke of “Criminal Referral” thus pushing for an investigation. As director of the Authority who supervises Fannie Mae and Freddie Mac, it was he who turned the spotlight on Cook mortgages.
Lisa Cook, as reported by an interview that she herself had given to ABC, had already clarified her position already two weeks ago, and the accusations concern before her appointment to the Federal Reserve.
Because the dismissal is not yet valid
But Trump’s letter may not have immediate value, and here you have to take a step back. The 1913 Federal Reserve Act says that a president can remove a governor only “for causes”, that is, for illicit or serious shortcomings related to the function.
So far no president had ever dared a lot, and the Cook case is the first real test. The accusations concern mortgages stipulated before his appointment, already passed under the examination of the Senate during the Biden administration. For many jurists, using them now as a reason for dismissal appears legally fragile.
In fact, Lisa Cook can challenge the decision (which is doing) and assert themselves in the judgment. Until there is an official sentence, approved by the Court or Parliament, Lisa Cook remains in its place. President Trump, with his letter, only started the procedure.
Lisa Cook’s reply: “There are no conditions, I don’t resign”
Lisa Cook immediately replied to the accusations, rejecting the idea that the president can drive it out of his assignment. In fact, he said:
President Trump tried to fire me for just cause and has no authority to do it.
He recalled that he was never offending or formally accused of fraud on mortgages and that therefore there is no legal reason to remove it.
He therefore clarified that he does not intend to give up the armchair:
I will not resign. I will continue to carry out my duties to support the American economy as I have been doing since 2022.
The lawyer Abbe David Lowell has branded the decision as “illegal action” and announced a full -blown battle. He explained that they will use “any action necessary to prevent” an intervention that judge without foundation. For him, Trump’s move is lacking in procedure and legal base.
Tensions with the Federal Reserve and the Powell knot
Trump’s arm wrestling with the Federal Reserve certainly does not arise today. For months, the president has been accusing Jerome Powell of not wanting to cut the rates with the speed that the White House claims.
Trump is certainly not limited to academic criticisms: he defined Powell a “number number” (hard head) and a “stuborn moron” (stubborn idiot).
As if that were not enough, he also pointed his finger on the maxi renovation of the Fed headquarters, a 2.5 billion dollar project that considers yet another excuse to evoke a removal “for just cause”.
Because the dismissal of Lisa Cook is so relevant
Lisa Cook, the first African American in the fed board, has thus become the perfect political target. Clearing it with a legal pretext would be a direct attack on the autonomy of the central bank.
And it’s not just cook: if Jerome Powell also turned out, the markets would tremble. Trump, of course, wants to bend the Fed to his interests. The consequence would be a blow to the credibility of monetary policy and a warning that all nominated biden are now in the sights of the president.
