President Donald J. Trump has now reportedly ignited a high-stakes clash with the Federal Reserve, announcing that he is removing Governor Lisa Cook from the Board of Governors—a move that may test the limits of executive authority but that the White House insists is necessary to safeguard public trust.
In a sharply worded letter dated Monday, the president informed Cook that “you are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately.” Mr. Trump asserted that Cook was being dismissed “for cause,” pointing to allegations that she may have falsified records in order to secure more favorable terms on a mortgage.
“The American people must be able to have full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve,” Mr. Trump wrote. “In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity.”
Cook, who became the first Black woman to serve on the Board in 2022, has not been charged with any crime.
Still, the Trump administration framed the move as essential to preserving the credibility of one of the nation’s most powerful financial institutions.
The president’s action comes against the backdrop of his long-running tensions with Federal Reserve Chairman Jerome Powell, who has resisted Trump’s demands to lower interest rates.
While Mr. Trump has publicly mulled the idea of firing Powell, he appears unlikely to pursue that course, as Powell’s term expires in May.
Cook, however, signaled that she has no intention of stepping aside. In a statement to The New York Times, she declared, “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so. I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
The president’s decision may ultimately collide with constitutional boundaries. A recent Supreme Court ruling in Trump v. Wilcox granted the president authority to remove officials from boards such as the National Labor Relations Board and the Merit Systems Protection Board.
Yet the Court carved out a distinction for the Federal Reserve, writing that “the Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States.”
That ruling suggests the president may not have the legal authority to remove Federal Reserve governors, setting up a likely battle between the administration and the courts.
For Mr. Trump and his allies, however, the fight is about more than statutory authority. It is about the integrity of the nation’s central bank.
By pressing the issue, the president is betting that the public will side with his insistence that no official is above scrutiny, and that the Federal Reserve must reflect both competence and honesty if it is to maintain its independence.
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