Federal Reserve board member Lisa Cook is defying President Trump’s threat to oust her as part of his effort to take control over the influential central bank.
Cook, the first Black woman to sit on the bank’s board, refused to step down and says the president doesn’t have the power to fire her.
“President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” Cook said in a statement issued late Monday. “I will not resign.”
Trump cited so-far unfounded allegations of mortgage fraud leveled against Cook by Bill Pulte, a Trump loyalist who leads a federal housing finance agency.
Cook has rejected the claim, which accuses her of claiming two homes as her primary residence.
“I have no intention of being bullied to step down from my position because of some questions raised in a tweet,” Cook said.
The effort to force out Cook marks a dramatic escalation in Trump’s effort to exert greater control over the Fed, which traditionally enjoys total independence from politics and has significant power over the U.S. and global economy.
Trump has repeatedly attacked Fed chair, Jerome Powell, for not cutting its benchmark short-term interest rate, and even threatened to fire him.
Democrats quickly pushed back against the effort to oust Cook.
“Lisa Cook—stand tough and don’t let Trump intimidate you,” Sen. Chuck Schumer (D-NY) tweeted.
“She has done (nothing) wrong,” added Rep. Hakeem Jeffries, the Democratic House minority leader.
If Cook is forced off the Fed’s governing board, it would provide Trump an opportunity to appoint a loyalist. Trump has said he would only appoint officials who would support dramatically cutting rates.
He might then be able to further mold the board to answer his directives. Most economists consider that to be a dangerous move, given that markets rely on the Fed to act in the best interests of the American economy as a whole, not the president’s political goals.
Global markets and the U.S. dollar dropped modestly on the news as investors awaited the opening bell on Wall Street.
Cook, a trailblazing economics guru, was appointed by former President Biden to a term on the seven-member board that is expected to run till 2038.
If she quits or is removed, Trump would get to replace her. Another board member recently resigned, giving Trump another slot to fill.
Powell’s term expires in May 2026 and Trump has already said he plans to replace him with a loyalist.
Trump has made similar claims of mortgage fraud against Democratic critics, including Sen. Adam Schiff (D-Calif.) and New York Attorney General Letitia James.
