Fed Governor Lisa Cook Sues Trump Amid Dismissal Attempt

9 hours ago

Newsroom

Why is Fed Governor Lisa Cook suing Trump?

What does this legal battle mean for central bank independence?

What are the broader implications of Cook's lawsuit for monetary policy?

Fed Governor Lisa Cook Sues Trump Amid Dismissal Attempt — Image source: Unblock Media

Governor Lisa Cook has filed a lawsuit against President Trump for trying to remove her from the Fed Board.
The legal action highlights escalating divisions between the White House and the Federal Reserve on monetary policy.

Federal Reserve Governor Lisa Cook has filed a lawsuit against President Donald Trump after his move to remove her from the central bank's board, according to The Block on August 28, 2025. The lawsuit, lodged in Washington, D.C., also names Federal Reserve Chair Jerome Powell and the Board of Governors as defendants in the case. The filing comes amidst rising friction over monetary policy, underscoring tensions between the Federal Reserve and the White House.

Cook’s removal attempt is viewed by some observers as part of a broader strategy by President Trump to strengthen his control over monetary policy decisions by reshaping the Federal Open Market Committee (FOMC), according to investment bank TD Cowen. The president’s goal appears aimed at securing a majority on the committee aligned with his desire for lower interest rates. TD Cowen highlighted that such a majority could allow Trump to influence reserve bank president appointments and create a more compliant FOMC.

President Trump has been openly critical of Federal Reserve Chair Jerome Powell for not cutting interest rates. The established framework governing the Federal Reserve limits the dismissal of board members to removal "for cause," a safeguard designed to ensure the institution’s political independence. Governor Cook’s lawsuit reinforces how this principle is increasingly being tested amidst the conflict.

Amid this turmoil, President Trump recently nominated Stephen Miran to the Federal Reserve Board of Governors to replace Adriana Kugler, according to The Block. Miran, described as crypto-friendly and critical of Powell’s leadership, has publicly advocated for reduced regulations in the cryptocurrency space. His nomination is scheduled for Senate Banking Committee confirmation hearings next week. Analysts at TD Cowen speculate that Miran, if approved, could align with Fed Vice Chair Michelle Bowman and Governor Chris Waller to support rate cuts, adding further complexity to the policy landscape.