Federal Reserve governor Lisa Cook sued President Donald Trump on Thursday, the beginning of a landmark legal battle over what she calls Trump's "unprecedented and illegal" efforts to remove her from the central bank and the committee that makes decisions about the nation's interest rates.
Cook also seeks an emergency temporary restraining order that would remain in effect "until such time as the Court can further consider the merits of her claims."
In her lawsuit, Cook seeks a "declaration that President Trump’s August 25, 2025 purported firing ... is unlawful and void and that Governor Cook remains an active member of the Board of Governors of the Federal Reserve."
Cook also seeks a declaration from the court that "an unsubstantiated allegation of mortgage fraud prior to a Governor’s confirmation is not cause for removal." Trump has sought to remove her over the allegations, which Federal Housing Finance Authority Director Bill Pulte first levied on Aug. 20.
A judge set a hearing about the lawsuit for 10 a.m. E.T. Friday in Washington.
Cook is the first Black woman to serve on the board of what is considered to be the world’s most important central bank. She hasn’t been charged with any crime.
Under the Federal Reserve Act, Federal Reserve governors can be removed from their positions only “for cause,” or some kind of wrongdoing. Trump's letter to Cook said the administration believes she "may have made false statements on one or more mortgage applications."
"The 'for cause' standard is not defined in the [Federal Reserve Act], but statutes establishing the standard for other independent agencies expressly limit cause to the standard that ... there must be a specific finding of 'inefficiency, neglect of duty, or malfeasance in office,'" Thursday's filing says.
"President Trump did not purport to remove Governor Cook for 'inefficiency, neglect of duty, or malfeasance in office,' or for any actions that were carried out in the course of her official duties."
In an additional filing, Cook’s lawyers say that "the President and Director Pulte have not even alleged explicitly that Ms. Cook benefited from any clerical error, or that such an error was intentional."
Pulte seized on that line, writing on X that "Lisa Cook confessed 'errors;' claims its clerical but still an error!"
Yet Cook's filing says: "Even if Governor Cook had committed the infractions that the President alleges—which she did not—the President would lack 'cause' to remove her."
Cook's lawsuit also names the Federal Reserve Board of Governors and Chair Jerome Powell as defendants because the lawsuit says they are required to take action to effectuate a lawful removal order from the president.
The Fed said in a statement Tuesday: "Lisa Cook has indicated through her personal attorney that she will promptly challenge this action in court and seek a judicial decision that would confirm her ability to continue to fulfill her responsibilities as a Senate-confirmed member of the Board of Governors of the Federal Reserve System. As always, the Federal Reserve will abide by any court decision."
It declined to comment on Cook's lawsuit Thursday. The White House said Trump "exercised his lawful authority to remove a governor on the Federal Board of Governors for cause."
Cook's lawsuit also says that "an independent Federal Reserve is essential for a stable economy."
"An independent Federal Reserve also prevents presidential administrations from using monetary policy for self-serving political ends in other ways, such as ensuring the government cannot simply print more money to finance debt. This practice, when unchecked, can lead to economic collapse and hyperinflation," the suit says.
It notes that a recent Supreme Court decision made it clear that the Fed is a "uniquely structured, quasi-private entity" that has its own distinct historical tradition.
"Allowing the President to remove members of the Board over policy disagreements would also render illusory the Board’s independence," the suit adds.
Pulte’s allegations and Trump's attempted removal of Cook are the latest moves in an unrelenting pressure campaign against the Fed, Powell and now Cook. Trump has sought lower interest rates since before he took office for a second term and has attacked Powell and the Fed's rate-setting committee almost constantly.
Trump has said the board should be "ashamed" of itself and has fired off dozens more insults at Powell in interviews and on social media, calling him everything from "stupid" to someone who "hates me" and a "low IQ" person.
Cook's lawsuit cites Trump's long history of attacks against the Fed and his many threats this year to fire Powell.
Pulte's allegations against Cook closely echo similar unsubstantiated claims against other top Democrats.
"Each of Director Pulte’s criminal referrals have notably been, at one time or another, political targets of President Trump’s ire prior to any mortgage fraud allegations," Cook's lawyers write.
