President Donald Trump said he fired Federal Reserve Board Governor Lisa Cook on Aug. 25, his latest move to assert influence over the U.S. central bank after months of expressing dissatisfaction with its refusal to cut interest rates.

In a termination letter to Cook posted to Truth Social, the president cited allegations by Federal Housing Finance Agency Director Bill Pulte that she had lied on two applications for home mortgages in 2021. Trump's announcement comes days after Bloomberg reported that the Department of Justice signaled it would investigate Cook and Pulte's claim.

In a statement emailed to USA TODAY, Cook said Trump has "no authority" to remove her and that she has no plans to step down. Cook's lawyer, Abbe Lowell, said Trump's "demands lack any proper process, basis, or legal authority."

"I will continue to carry out my duties to help the American economy," Cook said in the statement. “President Trump purported to fire me 'for cause' when no cause exists under the law, and he has no authority to do so. I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”

Who is Lisa Cook?

Former President Joe Biden appointed Cook as governor of the Federal Reserve in 2022, making her the first Black woman to serve in the role. She was reappointed in 2023 for a term set to end in 2038.

Before joining the Board, Cook served as a senior economist on the Council of Economic Advisers under former President Barack Obama. From 2000 to 2001, she worked as a senior adviser on finance and development in the U.S. Department of Treasury's Office of International Affairs.

She also worked as a professor of economics and international relations at Michigan State University. She has a BA in philosophy from Spelman College, a second BA in philosophy, politics and economics from Oxford University, and a PhD in economics from the University of California, Berkeley.

What does Lisa Cook do?

As one of seven members on the Fed’s Board of Governors, Cook plays a leading role in guiding U.S. monetary policy.

Together, they comprise most of the Federal Open Market Committee, the group that works to balance keeping inflation and unemployment low. One of the committee's most powerful tools in attaining these goals is its ability to cut, raise, or keep interest rates steady, which affects how much money people can borrow and has a significant impact on the overall U.S. economy.

Cook has voted with the majority to keep interest rates steady in recent months, despite Trump’s calls for the committee to lower them.

If Trump is successful in firing Cook, the move will create a second vacancy on the Board. Governor Adriana Kugler, another Biden appointee, announced her early resignation in August. Trump nominated Stephan Miran, who chairs the White House's Council of Economic Advisers, to serve the remainder of Kugler's term but he has yet to be confirmed by the U.S. Senate.

Can Donald Trump fire Lisa Cook?

In the termination letter, Trump said he has authority to fire Cook under Article II of the U.S. Constitution and the Federal Reserve Act. The 1913 Act does allow the president to remove a Fed official “for cause.”

The question of whether the alleged false statements on her past mortgage applications constitute “cause” will be the subject of a legal battle. Cook's lawyer said Aug. 26 they will file a lawsuit challenging Trump's decision to fire her.

In an Aug. 20 social media post, Pulte claimed Cook committed mortgage fraud by designating two properties as her primary residence within a matter of weeks.

"We have sent a Criminal Referral to the Department of Justice with regard to the allegations against Ms. Cook, and the DOJ should go wherever the facts may lead them," Pulte wrote in the post.

U.S. Sen. Elizabeth Warren, a Democrat from Massachusetts who serves as the ranking member of the Senate Banking, Housing, and Urban Affairs Committee, called Trump’s move to fire Cook “illegal” in a statement Aug. 25.

“It’s an authoritarian power grab that blatantly violates the Federal Reserve Act, and must be overturned in court,” she said.

In a statement Aug. 26, Congressional Black Caucus members and Chair Yvette Clarke said they look forward to Cook serving out the remainder of her term.

"President Trump does not have the authority to remove Dr. Cook, and she has made clear that she does not intend to step down from the Board," the statement said.

Does Lisa Cook support interest rate cuts?

While Cook has voted in line with the FOMC majority to keep interest rates steady in recent months, Mike Skordeles, head of U.S. economics at Truist, and Timothy Chubb, chief investment officer at Girard, said Cook has generally been one of the committee's more dovish members.

"Her record while on the Fed for the last almost three years has reflected that she's generally supporting lower rates," Skordeles said.

Skordeles said as a labor economist, Cook generally tends to be more concerned about Fed decisions' impact on consumers and lending rates for things like mortgages or auto loans.

However, he said recent inflation and "a no-hire, no-fire" culture in the job market has put the FOMC in between a rock and a hard place, given its dual mandate to maintain stable prices and maximum employment.

"Inflation has been picking back up. There's the headline number and then there's signs underneath the surface," Chubb said. "The major red flags that we saw in the most recent inflation data was prices are going up for things that are associated with tariffs."

Skordeles said if Trump wants lower interest rates, going after Cook or Fed Chair Jerome Powell isn't necessarily the way to get them. He and Chubb both emphasized that while the Fed does influence long-term interest rates, it does not directly set them.

"The Fed controls overnight rates. They don't control prevailing interest rates," Skordeles said. "This notion that the Fed's going to cut and rates are going to go down — and, oh great, sunshine, unicorns, and confetti — that's not how rates work."

Skordeles and Chubb both said they trust the Fed will continue to independently make decisions based on data.

This story has been updated to add additional information.

Reach Rachel Barber at rbarber@usatoday.com and follow her on X @rachelbarber_

This article originally appeared on USA TODAY: Trump said he fired a Fed Gov. She said she's not stepping down. Who is Lisa Cook?

Reporting by Rachel Barber, USA TODAY / USA TODAY

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