Federal Reserve Governor Lisa Cook will sue to block President Donald Trump’s attempt to fire her, setting up a legal showdown over central bank independence. Her lawyer, Abbe Lowell, said Tuesday that the action “lacks any factual or legal basis," according to Reuters. Trump accused Cook of misrepresenting mortgage applications before she joined the Fed in 2022, calling her conduct “deceitful and criminal.” If removed, Trump could gain a majority on the seven-member Fed board. The Fed reiterated that governors serve 14-year terms and cannot be removed easily, citing the need for policy decisions based on economic data. Markets reacted mildly on Tuesday, with equities flat, the dollar down, and Treasury yields mixed. The fight could test the limits of presidential authority under the Federal Reserve Act, which allows removal “for cause” but has never been used against a sitting governor.
