President Donald Trump’s escalating attacks on Federal Reserve independence reached a new level Monday night when he attempted to remove Federal Reserve Governor Lisa Cook—the first Black woman to hold the position in its 111-year history—citing unfounded and seemingly pretextual mortgage fraud.
Now, in all-too familiar fashion, Trump unceremoniously announced Cook’s ‘removal’ in a letter posted on his wholly owned social media platform Truth Social, claiming “sufficient reason to believe you may have made false statements on one or more mortgage agreements.” The action holds no legal weight; but that did not prevent the President from using it as his latest spectacle for his hardened base.
The allegations against Cook originated from Federal Housing Finance Agency Director William Pulte, who was nominated by Trump in January 2025 and sworn in as FHFA director in March. Pulte accused Cook of “falsifying bank documents and property records to acquire more favorable loan terms, potentially committing mortgage fraud” in a letter to Attorney General Pam Bondi.
Pulte has made similar allegations against other Trump critics, including Senator Adam Schiff of California and New York Attorney General Letitia James. The timing of these accusations, raised while the Fed maintains its independence on interest rate policy against Trump’s unrelenting pressure, is hardly coincidental.
This accusation itself is curious, to say the least, given that the President has already been found civilly and criminally liable for a range of misconduct, including business fraud in the New York civil case against the Trump Organization, defamation in two separate cases brought by E. Jean Carroll, and 34 felony convictions for falsifying business records in the hush money trial.
Additionally, the timing is also curious. As pointed out in a tweet by Better Markets’ financial policy lead, Amanda Fischer, this attempted removal came just one day before the August 26 deadline for public comments on a sweeping proposal to raise capital requirements for large banks. While the rule is being advanced jointly by the Fed, FDIC, and OCC, the Fed’s governors shape both the direction of financial regulation and the credibility of the process.
Cook has consistently supported stronger oversight, emphasizing systemic risk, financial stability, and equity. Her presence on the Board offered a counterweight to deregulatory pressures. By moving against her on the eve of a major regulatory deadline, Trump appears to be sending a message intended to weaken internal opposition at the Fed, to signal solidarity with banks opposed to higher capital standards, and to punish a governor aligned with more rigorous safeguards.
The timing also functions as political theater. It shifts media attention from the mundane but consequential debate over bank capital rules to a president attempting to fire a Fed governor. And importantly, it diverts headlines from other politically damaging stories, including the steady drip of revelations from the Epstein files, which continue to cast a long shadow over political and business elites.
Cook Remains Unmoved
NPR reports that Cook responded swiftly and defiantly: “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.” Her statement not only rejects outright the President’s overreach but also underscores the legal protections and Congress—the first branch of government that is empowered to make laws—built into the Federal Reserve Act (FRA).
Under Section 10 of the FRA, members of the Board of Governors are appointed for staggered 14-year terms and may be removed by the President only ‘for cause’, not for policy disagreements or political convenience. The Supreme Court has historically upheld this protective structure for independent agencies, in often cited cases like Humphrey’s Executor v. United States (1935), which dealt with the presidential removal power of a Federal Trade Commission officer.
By refusing to resign, Cook is now thrust into the center of a looming constitutional showdown worthy of a law school casebook, one that will test whether America’s independent institutions can withstand direct presidential intimidation.
A Pattern of Intimidation
Trump’s pressure campaign extends far beyond the Federal Reserve. In May, Trump fired Carla Hayden, the first Black American and first woman to serve as Librarian of Congress since its founding in 1802, via email. Shira Perlmutter, the Register of Copyrights appointed by Hayden in 2020, was also terminated and has since sued to challenge her removal as unconstitutional.
Cook, the first Black woman on the Federal Reserve Board in its 111-year history, is now the latest target in this systematic effort to sideline Black leadership. NPR reports she responded swiftly and defiantly: “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.”
What’s Really at Stake
Federal Reserve independence is not an abstract principle; it is the foundation of U.S. economic credibility. When central banks are captured by political leaders, history shows the result is economic catastrophe, from Weimar Germany’s hyperinflation to more recent authoritarian experiments. The Fed’s independence allows it to raise interest rates when necessary and to base decisions on data, not electoral calendars. That credibility is why the dollar remains the world’s reserve currency and why global markets trust U.S. policy.
Markets have already signaled their concern. Within hours of his announcement, the U.S. Dollar Index fell and Treasury yields shifted. The uncertainty created by Trump’s campaign against Fed leaders injects instability into the very system he claims to strengthen.
Legal and Constitutional Questions
The Federal Reserve Act of 1913, through Section 10, established 14-year terms and “for cause” removal protections for governors — meaning corruption or misconduct, not policy disagreements. Trump’s team appears to be searching for flimsy pretexts, from renovation cost overruns to alleged mortgage irregularities, to get around those safeguards. Undermining them would set a dangerous precedent, politicizing monetary policy for future administrations of either party.
The Broader Democratic Crisis
Trump’s removals vary in legality but reveal a consistent pattern. The Librarian of Congress sits in the legislative branch, making Hayden’s “firing” legally dubious at best. Fed governors like Cook are protected by statute, so Trump’s letter rests on shaky ground. By contrast, presidents may lawfully dismiss cabinet secretaries like Lloyd Austin or replace military leaders like General Charles Q. Brown Jr., but those decisions appeared politically motivated rather than performance-based. Taken together, these episodes reveal a systematic effort to marginalize highly qualified Black leaders under the guise of presidential authority, eroding institutional independence and democratic norms alike.
What Comes Next
Lisa Cook has made clear she will not resign. Congress must defend institutional independence, and senators who confirmed her should speak out against intimidation tactics. Business leaders must also recognize that the long-term costs of undermining the Fed outweigh any short-term gains.
Conclusion
Trump’s attempted removal of Lisa Cook and his broader pressure campaign against Jerome Powell are not mere political theater; they are direct assaults on independence, governance and the legitimacy of Black leadership. The Fed’s credibility has safeguarded U.S. prosperity for more than a century, through wars, recessions and crises. That credibility is now in question, with immediate negative macroeconomic impacts already rippling through markets.
The world is watching, waiting to see not just Trump’s next move, but America’s.
