by Ariana Figueroa, Kentucky Lantern
August 28, 2025

WASHINGTON — Lisa Cook, a Federal Reserve governor, sued President Donald Trump Thursday, calling his move to fire her an “unprecedented and illegal attempt” that jeopardizes the independence of the board. 

The suit, filed in the U.S. District Court for the District of Columbia, sets up a fight between the Federal Reserve and the president who has tried to pressure the independent board to lower interest rates. The challenge could go all the way to the Supreme Court. 

The suit argues that the president’s Monday decision to remove her was political and violated her due process rights because she had no chance to respond to the allegations of mortgage fraud a Trump appointee lodged against her. Cook has not been charged with any crime.

“It is clear from the circumstances surrounding Governor Cook’s purported removal from the Federal Reserve Board that the mortgage allegations against her are pretextual, in order to effectuate her prompt removal and vacate a seat for President Trump to fill and forward his agenda to undermine the independence of the Federal Reserve,” according to the suit. 

The suit also emphasized the importance of the Fed’s independence from elected officials.

“The operational independence of the Federal Reserve is vital to its ability to make sound economic decisions, free from the political pressures of an election cycle,” according to the suit.

The case is assigned to Jia M. Cobb. Former President Joe Biden appointed Cobb in 2021. 

The suit asks the district court to allow Cook to continue serving on the Fed as she challenges her removal. 

In a statement to States Newsroom, White House spokesperson Kush Desai defended the president’s decision to remove Cook.

“The President determined there was cause to remove a governor who was credibly accused of lying in financial documents from a highly sensitive position overseeing financial institutions,” Desai said. “The removal of a governor for cause improves the Federal Reserve Board’s accountability and credibility for both the markets and American people.”

Rift highlights policy differences 

Cook, the first Black woman appointed to the Fed, has consistently voted against lowering interest rates since joining the board in 2022. Her term ends in 2038. 

If Trump is successful in removing her and is able to nominate a replacement, he could have a majority of Fed members who are aligned with his desire to lower interest rates to boost the economy.

Despite Trump’s long-running pressure campaign, the Fed has kept rates steady amid concerns that the president’s tariffs will produce price hikes. 

The allegations of mortgage fraud stem from Bill Pulte, the director of the Federal Housing Finance Agency. Pulte accused Cook of making a false statement on a mortgage application to obtain a more favorable rate on her second home. He referred the matter to the Department of Justice for criminal prosecution. 

The suit does not address the merits of the allegations.

Pulte has made similar mortgage fraud accusations against two other political enemies of Trump’s: New York Attorney General Letitia James, who investigated the president’s business dealings and won a finding of fraud in state court, and California U.S. Sen. Adam Schiff, who led the investigation into Trump’s first impeachment inquiry.

Kentucky Lantern is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Kentucky Lantern maintains editorial independence. Contact Editor Jamie Lucke for questions: info@kentuckylantern.com.

The post Fed Governor Cook sues Trump, blasts attack on central bank’s autonomy appeared first on kentuckylantern.com

Note: The following A.I. based commentary is not part of the original article, reproduced above, but is offered in the hopes that it will promote greater media literacy and critical thinking, by making any potential bias more visible to the reader –Staff Editor.

Political Bias Rating: Center-Left

This content leans slightly center-left as it highlights a legal challenge against former President Donald Trump’s actions, emphasizing concerns about political interference and the importance of Federal Reserve independence. The article presents the lawsuit and criticisms of Trump’s decision in detail, while also including the White House’s defense, maintaining some balance. However, the focus on the alleged political motivations behind Trump’s move and the framing of the suit’s arguments suggest a perspective more critical of Trump and supportive of institutional checks on executive power, which aligns with a center-left viewpoint.