Former President Donald Trump’s attempt to expand his influence over the Federal Reserve is facing a critical legal challenge this week. On Friday, Federal Reserve Governor Lisa Cook filed an urgent request in court, asking for a temporary order to block Trump’s unprecedented effort to remove her from her position. A hearing on the matter is expected to take place in the coming days, and many experts believe the outcome could set an important precedent for the future independence of the central bank.
Lisa Cook filed a lawsuit against the U.S. president on Thursday, with her attorneys calling his move “unprecedented and illegal,” and based on “pretextual” claims.
The case is widely expected to reach the Supreme Court ultimately. In the meantime, Cook is seeking a temporary restraining order to prevent Trump from “immediately” dismissing her from the Fed’s board.
A hearing on the motion is scheduled for 10 AM. Friday in Washington before U.S. District Judge Jia Cobb, a Biden appointee.
On Monday, Trump wrote to Cook informing her that she was being removed “effective immediately,” citing an allegation from an ally that she had obtained a mortgage on a second home while incorrectly identifying it as her primary residence.
For months, Trump has criticized the Fed, where most policymakers, including Cook, have resisted his calls for interest rate cuts. He has publicly discussed building a “majority” on the central bank’s board, raising questions about the future independence of the institution from political influence.
Removing Cook, whose term is set to run until 2038, would allow Trump to nominate a replacement. Cook, however, contends that the president has “no authority” to remove her.
Her lawyers argue in the complaint: “An unsubstantiated allegation about private mortgage applications submitted by Governor Cook before her Senate confirmation does not constitute justification. President Trump’s letter purporting to fire Governor Cook did not cite an appropriate reason for removing her from the board of governors.”
The White House stated on Thursday that Cook had been “credibly accused of lying” by the administration, though the claims remain unverified. Her legal team notes that Trump and his officials have not asserted that any mistake in her mortgage paperwork was intentional.
The legal showdown comes as the Fed prepares to resume interest rate cuts as early as next month, though likely not at the pace or scale Trump has demanded. Chair Jerome Powell has warned that the president’s tariffs and immigration policies have disrupted the global economy and affected the U.S. labor market.
