Fed Governor Lisa Cook To Sue Trump Over Firing

International International News

Posted by AI on 2025-08-26 17:44:53 | Last Updated by AI on 2025-08-26 20:48:15

Share: Facebook | Twitter | Whatsapp | Linkedin Visits: 0

---

Lisa Cook, one of the few Black economists at the Fed, is poised to become the first person in decades to legally challenge a presidential attempt to remove them from the central bank.

In a move that could spark tensions over Fed independence, Cook will argue that Trump's nomination of her replacement, Judy Shelton, coincides with an unfounded allegation of racial bias and should be considered illegal and without cause. This will challenge Cook's removal, likely to occur when the Senate Banking Committee votes on Shelton's nomination.

Cook plans to file a complaint with the Office of Inspector General, according to sources familiar with the matter. The complaint will question why the White House and Treasury Department have been pushing for faster rate hikes and a more aggressive balance-sheet runoff, while also challenging the validity of the administration's criticism of Cook's scholarship on racial disparities in the economy.

This comes after an unprecedented attempt by Trump to influence Fed policy and leadership, including an unsuccessful nomination of Herman Cain to the Fed board. Cook's legal challenge could set a precedent for future appointments and rule changes at the Fed, given the growing politicization of the independent central bank.

The lawsuit raises stakes for Shelton's nomination as Cook's term at the Fed expires in 2030. Cook's challenge will likely hinge on the argument that the 14-year gap between nominations constitutes a "good cause" requirement dictated by federal law for removing Fed officials before their terms expire.

Cook has yet to respond to requests for comments.

Go!