NATIONAL NEWS – Fed Governor Lisa Cook sues Trump administration over firing attempt that risks Fed’s independence

Ananya Roy, News Writer

Federal Reserve Governor Lisa Cook has filed a lawsuit against the Trump administration after the president attempted to fire her, setting up an unprecedented court fight over the Fed’s independence. The suit seeks to block her removal and confirm her status as a board member, arguing that Trump’s stated reason, allegations of mortgage fraud in 2021, before her appointment, does not constitute legal cause for dismissal. Cook has not been charged with any crime.

The case could reshape the 112-year-old Federal Reserve, which was designed to operate free from day-to-day political control. Economists warn that if Trump succeeds, the Fed could be pressured to keep rates artificially low, stoking inflation and raising long-term borrowing costs.  Some economist argue that such actions could crash markets and lead to financial disaster in the U.S., trickling down to other countries. The lawsuit also contends the allegations are a pretext for Cook’s refusal to back Trump’s demand for much deeper rate cuts. Currently, the Fed’s benchmark rate stands at 4.3%, with policymakers expected to trim it further this fall, but not to the 1.3% level Trump has publicly demanded. If Cook is removed, Trump could secure a majority on the Fed board by filling her seat with a loyalist committed to lower rates.