On August 25, 2025, President Donald Trump announced his intention to fire Lisa Cook, the first Black woman to serve on the Federal Reserve Board of Governors. This unprecedented move has set off a political and legal firestorm, raising questions about the independence of the nation’s central bank and the boundaries of presidential power. Cook, a renowned economist specializing in macroeconomics and financial policy, was confirmed to the board in 2022 after a distinguished career in academia and public service. Her appointment marked a historic milestone for representation in the upper echelons of U.S. economic policymaking.
Trump’s attempt to dismiss Cook hinges on allegations of mortgage fraud. He accused her of “deceitful and potentially criminal conduct” related to listing two residences as her primary residence on loan applications submitted before her Federal Reserve service. Despite the gravity of such claims, Cook has not been charged or convicted of any wrongdoing. According to The 19th, these allegations echo tactics Trump’s allies have used against other political opponents, including New York Attorney General Letitia James and Senator Adam Schiff of California.
Cook’s lawyer, Abbe Lowell, responded swiftly, stating on August 26 that Cook would file a lawsuit to challenge Trump’s attempt to remove her. In a statement issued through Lowell, Cook said, “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 legal standoff is poised to become a test case for the limits of presidential authority over the Federal Reserve, an institution deliberately designed to be insulated from political interference.
“The Federal Reserve is meant to be protected from these types of political pressures. It is an independent institution,” said Aya Ibrahim, a former senior policy adviser at the White House National Economic Council who supported Cook’s confirmation. Ibrahim explained on Democracy Now! that the president can only remove a Federal Reserve governor “for cause,” a term that is legally ambiguous and, until now, rarely tested in court. The Federal Reserve Act does not define what constitutes “cause,” leaving the courts to interpret whether unproven allegations of misconduct meet the threshold.
The legal context is further complicated by the Supreme Court’s Wilcox decision in May 2025, which granted the president latitude to remove independent regulators, such as those at the National Labor Relations Board and Federal Trade Commission, for cause. Whether this precedent extends to the Federal Reserve Board remains an open question. “This is really a test of those limitations,” Ibrahim noted. “Allegations and unfounded allegations of misconduct are not cause. And Governor Lisa Cook and all others who were confirmed to the Board of Governors were confirmed to tenured roles. All of this is part of a design meant to insulate the Federal Reserve as an institution from the types of political pressures and attempts at power grabs that this president is clearly pursuing.”
Trump’s move against Cook is part of a broader campaign to pressure the Federal Reserve to lower interest rates. He has also repeatedly threatened to fire Federal Reserve Chair Jerome Powell, who indicated on August 20 that the board could cut interest rates at its upcoming September 16 meeting. According to Democracy Now!, the president’s aggressive tactics have raised concerns among financial analysts about the credibility and stability of the U.S. economy. “The defining feature of the U.S. economy, even in times of crisis, is an underlying stability and, more importantly, credibility,” Ibrahim said. “This president has come in and injected all kinds of questions into what otherwise was a settled matter.”
Lisa Cook’s career has been marked by a commitment to research and advocacy on race, inequality, and international economics. Before her appointment to the Federal Reserve, she was a professor at Michigan State University and served on the Council of Economic Advisors during the Obama administration. Her research has examined the impacts of lynchings on Black inventors between 1870 and 1940, the links between segregation and innovation, and the causes of gender and racial disparities in economics. One of her most cited papers found that violent lynchings of Black Americans significantly reduced the number of patents awarded to Black inventors, highlighting the long-term economic costs of racial violence.
Cook has also been a vocal advocate for increasing diversity in economics, a field historically dominated by White men. She directed the American Economic Association’s Summer Training Program from 2018 to 2021, working to expand opportunities for women and people of color. In 2019, Cook co-authored a New York Times op-ed with Anna Gifty Opoku-Agyeman, emphasizing the persistent barriers facing Black women in economics, including discrimination and harassment. They wrote, “A century later the experience of black female economists is disturbingly similar.”
Her historic appointment to the Federal Reserve was seen as a breakthrough for representation and expertise at the highest levels of economic policymaking. As Cook herself recalled during her 2023 congressional nomination hearing, “My dedication to public service was invigorated by observing the courage and resolve of my late parents and other members of my family. We stood alongside friends and neighbors whose names were never recorded, and others, like the Rev. Dr. Martin Luther King, Jr, whose memories are engraved in our nation’s history.”
Congressional Democrats and advocacy groups have condemned Trump’s attempt to fire Cook, framing it as part of a pattern of targeting prominent Black women in government. “Dr. Lisa Cook is the first Black woman ever to serve on the Federal Reserve Board of Governors,” said House Minority Leader Hakeem Jeffries. “Donald Trump is trying to remove her without a shred of credible evidence that she has done anything wrong.” Fatima Goss Graves, president and CEO of the National Women’s Law Center, called the move “further evidence of his strategy to illegally dismantle a politically independent body he cannot control.” She added, “Time and time again, the president has targeted Black women leaders and has tried to push them out of positions of power.”
For many observers, the stakes go far beyond Cook’s personal fate. The Federal Reserve’s independence is widely regarded as essential to its ability to manage inflation, maximize employment, and ensure economic stability. The board is composed of seven governors, each serving staggered, tenured terms. Its decisions on interest rates and monetary policy have far-reaching consequences for the U.S. and global economies. As Ibrahim put it, “The central bank needs to be able to, again, execute its mandate without fear of retribution or targeting by the president.”
The outcome of Cook’s legal challenge will likely set a precedent for the balance of power between the White House and the nation’s central bank. As the legal battle unfolds, Cook has made clear her intention to remain focused on her work. “Knowing Governor Cook, her main focus is doing the job that she was confirmed to do,” Ibrahim said.
As the drama plays out in courtrooms and newsrooms alike, the future of the Federal Reserve’s independence—and the precedent for political interference in economic policymaking—hangs in the balance.
