Trump announces firing of Fed governor
President's authority to remove Cook questioned
By: Baily Schulz
Bart Jansen
Medora Lee
and Rachel Barber
USA Today
..... President Donald Trump's announcement that he's firing Federal Reserve Governor Lisa Cook is an unprecedented move that could lead to along legal battle as the president looks to shape the balance of the central bank's seven-member board in his favor.
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The August 25, [2025] move raise more questions about the Fed board's independence, a president's involvement in monetary policy and credibility in U.S. investments.
..... "I have determined that there is sufficient cause to remove you from your position, Trump wrote in a letter to Cook shared on Truth Social, pointing to accusations that Cook made false statements on mortgage agreements.
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Cook said August 26 [2025] the president lacked the basis and the authority to oust her from the board of the central bank.
..... Her firing comes amid Trump's months-long efforts to influence the center bank's rate-cut decisions. Trump had previously focused on pressuring Fed Chair Jerome Powell to lower rates through name-calling and termination threats, although the president has since walked back threats to remove the Fed chair.
..... Cook, in a statement released by her lawyer, said of Trump that "no causes exist under the law, and he has no authority' tor remove her from the job she was appointed to by former President Joe Biden in 2022.
..... "I will continue to carry out my duties to help American economy," she said in a statement emailed to USA Today.
..... Cook's attorney, Abbe Lowell, said Trump has "no authority" to remove Cook, and that the president's attempt " attempt any factual or legal bases."
..... "we will be filing lawsuit challenging this illegal action, Lowell said.
..... The Federal Reserve act of 1913 says a president can only fire a Fed governor "for cause." a member of Trump's administration field a referral to the Justice Department over allegations involving mortgages Cook obtained in Georgia and Michigan.
..... In a statement torching Trump for trying to fire cook, the Congressional Black caucus said, "In the 111-year history of the Federal Reserve, no president has ever attempted to remove a governor of the central bank until now."
..... President Trump is attempting to oust Dr. Lisa Cook - the first Black woman to serve on the Federal Reserve Board - with no credible evidence of wrongdoing," according to the statement form caucus members. "This is a blatant effort to distract from his failure to lower costs for Americans and a transparent attempt to install a loyalist at the central bank who will carry out his agenda without question.
..... Governor Adriana Kugler, another Biden appointee, announced an earlier resignation in August. [2025] Trump nominated Stephen Miran who chairs the White House's Council of Economic Advisers, to serve the roughly six mounts reaming of Kugler's term, although Miran has yet to be confirmed by the Senate.
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The board also has two Trump-appointed board members, Michelle Bowman and Christopher Waller, both of whom have expressed support for lower rates.
..... Powell, who was appointed by Trump as chair in 2017 and reappointed in 2022 under former President Joe Biden, is set to end his term as chairman in May 2026, although he could serve as a governor until 2028. Cook was nominated to the Fed's board of governors by Biden, along with board members Philip Jefferson and Michael Barr.
..... If Miran replaces Kugler and Cook is ousted from her seat, Trump's nominees would have a majority on the seven-person board.
..... The board members, along with the five presidents of the regional Federal Reserve banks, make up the Federal Open Market Committee, which decides the Fed's key interest rate.
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Powell had already singled that the Fed could move toward interest rate cuts soon.
..... The Fed adjusts interest rates to support its dual mandate of keeping prices stable and employment high. when inflation is high, the fed can raise rates to make borrowing more expensive and cool economic activity. when unemployment is high, cutting rates can promote economic growth and hiring.
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The Fed has kept rates steady since late 2024 amid concerns that tariffs could drive up consumer prices, but that could soon change. While the fed has yet to commit to a rate cut, Powell on August 22 [2025] said "the balance of risks appears to be shifting" as the downside risks to employment rise, which "may warrant adjusting our policy stance."
..... The central bank was established as an independent agnecy so that its decisiosn are based on what;s best for the economy. confidence in the Fed's autonomy could take a blow if hte Fed bows down to a president's demands without a sound bases.
..... "The concern is the intent of the Trump administration" It's not to preserve Fed integrity, it's to install Trump's won people at the Fed," said Kyle Rodda, senior financial market analyst at Capitol.com , of cook's firing, as reported by Reuters. "It goes back to trust in institutions. ... It's another crack in the edifice of the United States and its invisibility."
..... Analysts say that could erode the value of the U.S. dollar, which has already grown weaker this year. [2025]
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"The dollar continues to weaken as American governance continues to erode," said Skanda Amarnath, executive director of think tank employ American and a former Fed economist. "That means higher prices for all commodities."
..... The Fed has been formally independent since 1951, but it was in the 1980s when Fed Chair Paul Volckere established the Fed's inflation-fighting credibility. Since then, more than a hundred central banks, including the back of England in 1998, have been greatened increasing degrees of formal independence, Reuters reported.
..... Central bank independence is widely seen as key to keeping down inflation and maintaining stability in the global financial system.
..... "People don't realize how different the world has been in the past 30 years from what it was before in terms of inflation stability," Jordi Gali, a professor at the Barcelona School of Economics, told Reuters.
..... Contributing: Reuters