Trump fires Fed Governor Lisa Cook in first dismissal in 111 years, setting stage for Supreme Court battle
U.S. President Donald Trump announced on Aug. 26 the
dismissal of Federal Reserve Governor Lisa Cook, CNN
reported, marking the first time in the Fed’s 111-year history that a sitting
president has removed a senior central bank official.
“Pursuant to my authority under Article II of the Constitution
of the United States and the Federal Reserve Act of 1913, as amended, you are
hereby removed from your position on the Board of Governors of the Federal
Reserve, effective immediately,” Trump wrote in a letter posted on his Truth
Social account.
As the reason for the dismissal, he cited “deceptive and
potentially criminal conduct in financial matters” and “gross negligence in
financial operations,” which, Trump said, calls her professional competence
into question.
In response, Cook said: “President Trump has purported to
fire me ‘for misconduct,’ which does not exist under the law, and he lacks the
authority to do so.”
She emphasized that she does not intend to resign and “will
continue to carry out my duties for the good of the American economy, as I have
since 2022.”
Fortune
said the dispute will likely be taken up by the Supreme Court.
A previous court ruled that Fed officials have a special
status that protects them from removal except for the “presence of cause” (for
cause). Traditionally, that means serious wrongdoing or failure to perform
official duties.
Since returning to the White House, Trump has been
pressuring the Fed to cut rates and regularly criticizes its chair, Jerome
Powell – even threatening to fire him.
Powell’s term as chair ends in May 2026, but his term as a
member of the Board runs to 2028. Of the seven governors, two are already Trump
appointees – Michelle Bowman and Christopher Waller. He has also put forward
his adviser Stephen Miran to fill the seat of Adriana Kugler, who resigned in
January. Miran is known as a supporter of rate cuts and co-author of a 2024
article that called for curbing the Fed’s independence.
According to the report, if Trump can appoint one more
member, his nominees would hold a majority on the Board. That would give them
control over the Fed’s budget, personnel decisions and even the selection of
regional presidents, whose terms expire in February.
Earlier, it was reported that the U.S. Federal Reserve had
decided on the lending rate.
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