Fed’s Lisa Cook Sues Trump Over Dismissal, Citing Central Bank Independence

- Lawsuit challenges President Trump’s move to remove Cook, citing risks to the Federal Reserve’s independence. - Trump nominates pro-crypto advocate Stephen Miran to the Fed board, signaling potential policy shifts. Federal Reserve Governor Lisa Cook has filed a lawsuit against President Donald Trump in a Washington, D.C. federal court, contesting her removal from the central bank's board. The legal filing, dated August 28, 2025, names Trump, Federal Reserve Chair Jerome Powell, and the Fed Board of Governors as defendants. This action intensifies tensions between the White House and the Federal Reserve, with Cook claiming in the filing that her dismissal is an "unprecedented and illegal attempt" to compromise the central bank’s independence. President Trump’s dismissal letter, dated August 25, 2025, alleges “sufficient cause” for her removal, tying the decision to mortgage fraud accusations from 2021, before Cook's tenure at the Fed. However, Cook denies these allegations and intends to continue serving as Governor. Her legal argument centers on federal law, which permits the removal of governors only “for cause.” The lawsuit warns that allowing removals based on unsubstantiated claims threatens the Federal Reserve’s autonomy, which is vital for ensuring stable economic policy. This dispute unfolds as President Trump continues to pressure the Federal Reserve for interest rate cuts, raising concerns that he is attempting to align the institution’s leadership with his economic objectives. In a related move, Trump has already nominated Stephen Miran, an outspoken advocate for cryptocurrencies, to the Federal Reserve Board. If the Senate Banking Committee confirms Miran, his appointment could foreshadow important regulatory shifts that favor the crypto industry. Trump has fanned speculation by hinting he will name Miran to Cook’s seat, a position with a long tenure through 2038. If confirmed, Miran’s pro-crypto stance could advance the Federal Reserve’s approach to digital assets and potentially reshape financial regulations for emerging technologies. As a result, financial markets are closely watching both Cook’s lawsuit and Miran’s nomination, as these events could trigger significant changes in monetary and regulatory policy.