Can President Trump Legally Fire Fed Governor Lisa Cook?

Business September 20, 2025

Lisa Cook is right in the middle of one of the most explosive legal battles in Washington. President Trump wants her off the Federal Reserve Board. But can he actually do it?

The Federal Reserve isn’t just any agency. It is built to be independent. Governors like Lisa Cook can’t be fired on a whim. Under the law, the president can only remove them “for cause.” But no one really knows what “cause” means because the law doesn’t spell it out.

Back in 1935, the Supreme Court looked at a similar question. In Humphrey’s Executor v. United States, the Court ruled that “cause” meant serious stuff, like neglect of duty or misconduct while in office. Not just any reason the president feels like using.

Now, Trump’s lawyers argue that the president can define “cause” however he wants. Cook’s team disagrees. They say “cause” has to be tied to what she has done since joining the Fed in 2022.

The Mortgage Fraud Allegations

Lisa Cook became a Fed governor in 2022, but Trump’s case is based on things she allegedly did before that. In 2021, she bought several properties and claimed them as primary or secondary homes to get better mortgage deals.

Fabulo / IG / According to Bill Pulte, head of the FHFA, she used some of them as rentals, which could be mortgage fraud. Cook says the paperwork was either a mistake or a clerical error.

She hasn’t been charged with any crime. Still, Trump pointed to these claims as his reason to fire her.

Critics say this is just politics. Cook is known for her more moderate stance on interest rates. Removing her would let Trump shift the Fed’s balance of power by adding loyalists who would support cutting rates, even if it sparks inflation.

Judge Slams the Brakes on Trump’s Move

On September 9, Judge Jia Cobb stopped the firing in its tracks. In a sharply worded order, she said Trump likely broke the law.

Her ruling made three key points. First, she said “cause” probably refers only to actions during Cook’s time as a Fed governor, not before. Second, Cook wasn’t given a chance to respond before being removed, which violates basic fairness. And third, kicking her out could damage the Fed’s independence, something the court sees as important to protect.

However, Trump’s team appealed the decision the next day, trying to fast-track it to the D.C. Circuit. But for now, Cook is still on the job.

There is a Bigger Political Game

Let’s not pretend this is just about legal definitions. Trump has made it clear he wants the Fed to lower interest rates. He has also made it clear he wants Fed governors who will support his economic agenda.

Trump / IG / With Cook gone, Trump could appoint someone who aligns more closely with his push for looser monetary policy. Many experts see this as part of a broader pattern.

Trump has gone after others he sees as opponents, from Letitia James to Adam Schiff. The fight over Lisa Cook fits that mold.

So what does the law actually say? The Federal Reserve Act allows removal “for cause.”

Historically, courts have said that means something serious, like neglect of duty or misconduct while in office. Not things that happened before you got the job. That’s where Judge Cobb leaned in her ruling.

The Supreme Court has ruled in recent years that presidents can remove agency heads more easily. But it also treated the Fed as a special case, calling it a “quasi-private” body. That might mean the usual rules don’t apply here.

And there is another problem. Trump didn’t give Cook notice. He didn’t let her defend herself. Courts tend to frown on that. If you are going to fire someone from a high-stakes, independent position, you need to follow basic due process.