Board of Governors of the Federal Reserve member Lisa Cook, speaks during a conversations with leaders from organizations that include nonprofits, small businesses, manufacturing, supply chain management, the hospitality industry, and the housing and education sectors at the Federal Reserve building, Sept. 23, 2022, in Washington. (AP Photo/Manuel Balce Ceneta, File)2025-08-28T13:43:43Z WASHINGTON (AP) Federal Reserve Governor Lisa Cook has sued the Trump administration in an effort to overturn the presidents attempt to fire her, launching an unprecedented legal battle that could significantly reshape the Feds longstanding political independence. The lawsuit seeks an injunction to block her firing and confirm her status as a member of the Feds governing board.No president has sought to fire a Fed governor in the institutions 112-year history until Trump posted a letter on media late Monday saying that Cook was fired. Trump said the reason for her removal were allegations that she committed mortgage fraud in 2021, before she was appointed to the board. The Supreme Court has signaled that the president cant fire Fed officials over policy differences, but he can do so for cause, typically meaning misconduct or neglect of duty. Most legal experts say that a for cause removal requires some type of process that would allow Cook to respond to the charges, which hasnt happened. Cook has not been charged with any crime. Lisa Cook, right, takes the oath of office to become a member of the Federal Reserve Board, May 23, 2022, in Washington. (AP Photo/Patrick Semansky, file) Lisa Cook, right, takes the oath of office to become a member of the Federal Reserve Board, May 23, 2022, in Washington. (AP Photo/Patrick Semansky, file) Share Share Facebook Copy Link copied Print Email X LinkedIn Bluesky Flipboard Pinterest Reddit Read More The law governing the Fed explicitly requires a showing of cause for a Governors removal, which an unsubstantiated allegation about private mortgage applications submitted by Governor Cook prior to her Senate confirmation is not, the lawsuit says. The presidents decision comes as he has repeatedly attacked Fed Chair Jerome Powell and the other members of the Feds interest-rate setting committee for not cutting the short-term interest rate they control more quickly. It currently stands at 4.3%, after Fed policymakers reduced it by a full percentage point late last year. Powell signaled last week that the central bank was leaning toward cutting its rate at its next meeting Sept. 16-17. Those attacks have opened up the White House to the criticism that its firing of Cook over alleged mortgage fraud is just a pretext to open up another seat on the board for a Trump loyalist. Trump has said he will only appoint people to the Fed who will support lower rates. The Fed exercises expansive power over the U.S. economy by adjusting a short-term interest rate that can influence broader borrowing costs for things like mortgages, auto loans and business loans. If the courts ultimately green-light Trumps firing of Cook, it could erode the Feds political independence, which enables it to take unpopular steps like raising interest rates. A less-independent Fed could leave Americans paying higher rates because investors would demand a higher yield to own bonds to offset potentially greater inflation in the future, pushing up borrowing costs throughout the economy. CHRISTOPHER RUGABER Rugaber has covered the Federal Reserve and the U.S. economy for the AP for 16 years. He is a two-time finalist for the Gerald Loeb award for business reporting. twitter mailto RSShttps://feedx.net https://feedx.site