Federal Reserve Governor Lisa Cook has stated that the Trump administration lacks a legal basis to remove her from her position at the central bank. This statement follows renewed accusations of mortgage fraud from President Donald Trump, despite a Supreme Court ruling in Cook's favor. Cook's legal team, including Abbe David Lowell and Norman Eisen, issued a letter rebutting the allegations, asserting that an inadvertent error does not constitute fraud. They argue that the attacks on Cook are an attempt by Trump to exert influence over the Federal Reserve.
In a warning dated August 5, the White House indicated that Trump was considering firing Cook due to alleged false statements on mortgage agreements, providing her with a three-week period to respond. This marks the second instance of Trump attempting to use mortgage fraud allegations to remove Cook, with a similar situation occurring in August 2025 that led to a Supreme Court case.
The Supreme Court ruled in June that presidents cannot remove Federal Reserve governors at will, emphasizing the protections established by the Federal Reserve Act of 1913 to maintain the bank's independence. Trump has been noted for seeking to expand executive power during his presidency, particularly regarding the Federal Reserve, where he has pressured members to lower interest rates. Experts caution that rapid interest rate cuts could negatively impact the value of the dollar.
Former Federal Reserve Chair Jerome Powell has also faced scrutiny from the Trump administration, including a criminal probe related to renovations at the bank's headquarters, which Powell described as an intimidation tactic. A federal judge later dismissed subpoenas related to this investigation, which was ultimately dropped in April, shortly before Powell's term as chair ended.