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- Trump said on Truth Social on Monday that he was removing Fed Governor Lisa Cook.
- The president previously called on Cook to resign. She said she's not stepping down.
- Trump "has no authority" to fire her, Cook said.
President Donald Trump said he removed a key official at the Federal Reserve, and it wasn't Jerome Powell.
Trump said in a letter posted to Truth Social on Monday evening that he was removing Fed Governor Lisa Cook, citing recent allegations made against her by Bill Pulte, the director of the Federal Housing Finance Agency.
Pulte, in a letter to the attorney general posted on X last week, accused Cook of making at least one false statement on mortgage agreements by having mortgages on two properties in two different states and describing both as her primary residence.
"Pursuant to my authority under Article II of the Constitution of the United States and the Federal Reserve Act of 1913, as amended, you are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately," the letter posted to Truth Social reads.
In a statement to various media outlets, Cook's attorney, Abbe Lowell, said they plan to fight the attempted removal. Cook said that she is not resigning.
"President Trump purported to fire me 'for cause' when no cause exists under the law, and he has no authority to do so," she said in the statement.
Markets reacted immediately as investors questioned the Fed's independence. The US Dollar Index fell as much as 0.4% before recovering to trade 0.1% lower at 4:16 a.m. ET on Tuesday. Benchmark 10-year Treasurys were also lower.
US futures slipped:
- S&P 500 futures: down 0.2% at 6,444.75
- Nasdaq futures: down 0.2% at 23,458.00
- Dow futures: down 0.2% at 45,253.00
Haven assets rose as investors rushed to safety. Gold was 0.4% higher at around $3,378 per ounce, and the Japanese yen was little changed after earlier gains.
Supreme Court collision course
Trump's decision to try to fire Cook puts him on a collision course with the Supreme Court, which has so far given him the green light to fire members of independent agencies.
A president can only remove a Federal Reserve governor for cause. Earlier this year, the Supreme Court allowed Trump to temporarily remove members of the National Labor Relations Board and the Merit Systems Protection Board while further litigation played out over whether presidents have the power to remove them without cause.
In one of those opinions, the conservative majority said the removals would not "implicate the constitutionality of for-cause removal protections" for Federal Reserve members because of the agency's "distinct historical tradition."
"The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States," the unsigned opinion said.
The Fed is scheduled to meet in less than a month. Its rate-setting Open Markets Committee has provisions to allow for alternate voters when a governor or a member of the panel misses a vote. It remains unclear how the Fed will proceed.
Last week, Powell said that the Fed would always make rate-setting decisions solely based on the judgment of the needs of the broader economy to balance inflation and unemployment — a once perfunctory message that has taken on renewed relevance amid Trump's frequent efforts to cajole the Fed into cutting rates.
"FOMC members will make these decisions, based solely on their assessment of the data and its implications for the economic outlook and the balance of risks," Powell said during his closely-watched speech during an economic policy summit in Jackson Hole. 'We will never deviate from that approach."
The White House and the Federal Reserve did not immediately respond to a request for comment from Business Insider.
Correction: August 25, 2025 — This story was corrected to include the correct spelling of Bill Pulte's last name. It is Pulte, not Plute.
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