Fed Governor Lisa Cook sues President Trump after move to remove her, setting up a test of central bank autonomy

Federal Reserve governor Lisa Cook asked a court to declare President Donald Trump’s order to dismiss her “unlawful and void,” launching litigation that could determine limits on presidential power over independent monetary policymakers.

Federal Reserve Governor Lisa Cook filed a lawsuit three days ago seeking a judicial declaration that President Trump’s attempt to remove her from the Fed is unlawful and should be voided, the complaint shows. The suit names President Trump as the primary defendant and also lists Federal Reserve Chair Jerome Powell, asking the court to enjoin enforcement of the removal order and to preserve Cook’s seat on the Board of Governors.

Cook’s complaint argues that the president’s directive to oust her would be “unprecedented and illegal” and would undermine the Board’s independence, according to a copy of the filing and statements from her counsel. The lawsuit was filed by attorney Abbe Lowell, who wrote that a successful removal would be “the first of its kind in the Board’s history” and would “subvert the Federal [Reserve].”

Lawsuit and claims

The complaint asks a federal court to declare void the president’s order and to block any attempt to carry it out. It challenges the legal basis for the president’s action, arguing that Cook’s removal would not be supported by the statutory or constitutional standards the suit cites. Cook’s legal filing also names Powell as a defendant, seeking clarity on the Board’s ability to retain her membership and to prevent the replacement of a sitting governor pursuant to the president’s instruction.

President Trump has publicly asserted there was “sufficient reason” to believe Cook had made false statements relating to mortgage documents and has invoked constitutional powers he says authorize her removal. Trump has framed his broader criticism of Fed officials as tied to their interest-rate decisions, repeatedly urging lower borrowing costs in public remarks and signaling frustration with what he considers an overcautious approach to monetary easing.

Cook has previously said that “no cause exists under the law” to remove her, framing the dispute as a defense of statutory protections and institutional independence. In his filing, Lowell argues that allowing the president to remove a governor without lawful cause would “subvert” the Federal Reserve’s statutory design and could compromise the Board’s ability to carry out its responsibilities.

The governor at the center of the dispute is a voting member of the Federal Open Market Committee, the Fed’s rate-setting panel. That role gives her a direct voice in decisions affecting interest rates and broader U.S. monetary policy.

Implications and reactions

Legal scholars and market participants have long treated the Federal Reserve’s operational independence as a key element of U.S. monetary policy credibility, though the precise contours of removal protections for Fed governors have not been definitively resolved by the Supreme Court. Cook’s suit could prompt a series of questions about statutory removal standards for members of independent agencies and the extent of presidential authority to dismiss them, potentially sending the case through appeals that could reach the high court.

The filing comes amid heightened tensions between the White House and the Fed. President Trump has repeatedly criticized Fed policy in public remarks, pressing for lower rates and signaling impatience with what he characterizes as insufficient accommodation. Those clashes have intensified scrutiny of the boundaries between political actors and the central bank’s insulated decision-making structure.

Media responses to the lawsuit have been divided along editorial lines. A New York Post opinion piece characterized Cook’s legal challenge as a defensive maneuver that the column said could serve to distract from allegations about mortgage paperwork and to immunize the Fed from political scrutiny. The Post also argued that the Fed has expanded its focus beyond the “dual mandate” of price stability and maximum employment and suggested that Cook’s stance should be viewed in the context of the Fed’s political appointments. The Post’s commentary is presented as an editorial view rather than a reporting of new facts.

Cook was appointed to the Board of Governors in 2022. Her membership and voting position on the FOMC mean that any abrupt change in the Board’s composition could alter deliberations on interest rates and monetary policy—changes markets monitor closely for their potential influence on asset prices and borrowing costs across the economy.

What the lawsuit could trigger

If the court accepts the central elements of Cook’s challenge, a decision could reaffirm statutory protections that limit the ability of presidents to remove Fed governors except for specified causes. If the court rejects the claim or defers to broader presidential authority, the ruling could realign expectations about executive control over independent agency members and prompt legislative or institutional responses.

The case is likely to focus initially on whether the president’s stated reasons satisfy any statutory “cause” standard and on doctrinal questions about separation of powers and agency independence. Past Supreme Court decisions in related areas—such as rulings on removal protections for other independent agency officials—may inform judicial reasoning, but precedents differ across agencies and legal contexts.

Both the White House and Cook’s legal team may seek summary resolution on procedural grounds or push for full briefing and oral argument. Given the high-stakes implications for central bank independence and the possible need for authoritative interpretation of federal law, the dispute could ultimately be resolved at the appellate level and, if contested, by the Supreme Court.

Market and policy observers will watch the litigation closely for any immediate effects on Fed governance, the timing of policy decisions and investor confidence. While the suit itself does not change Board membership until and unless a court rules otherwise, it underscores the intersection of legal standards, institutional design and partisan disagreement over economic policy.

Cook’s lawsuit places a spotlight on the legal architecture that governs the Federal Reserve and on how political conflict between the White House and the central bank may be adjudicated in the courts. The outcome could affect not only one governor’s tenure but also broader expectations about how insulated monetary policymakers are from removal by elected officials.

Sources

• https://www.bbc.com/news/articles/c1dxl6ry4y3o?at_medium=RSS&at_campaign=rss
• https://nypost.com/2025/08/30/business/lisa-cook-standing-up-for-the-federal-reserve-is-a-ploy-to-turn-a-blind-eye-from-her-mortgage-scandal/