Fed governor Cook sues Trump administration in fight over firing

Federal Reserve governor Lisa Cook sued President Trump on Thursday, days after her firing, and sought emergency orders to let her stay in office. Why it matters: It is the beginning of an unprecedented legal battle over the White House's attempt to remove a top central bank official.Trump has put immense pressure on the Fed since taking office, moves intended to secure lower interest rates. This lawsuit is the first sign of an official formally fighting back.Details: The suit, filed in a D.C. federal court, asks for a preliminary injunction that would allow Cook to continue to serve as a Fed governor as the case plays out.The Fed and chair Jerome Powell are also named as defendants as a technicality, given the central bank's potential role in carrying out Trump's firing demand.The big picture: Abbe Lowell, who represents Cook, argues that Trump's basis for firing Cook does not rise to the legal standard that allows him to remove Fed officials.The firing stems from allegations made by Federal Housing Finance Agency director Bill Pulte, who accused Cook of mortgage fraud. In a complaint, Lowell says those claims are "unsubstantiated allegations about conduct that predates her Senate confirmation, and Governor Cook has never been given an opportunity to address them."The intrigue: The suit does not explain why Cook listed two properties as primary residences, which is at the heart of Pulte's allegations.Instead, the case focuses on a clause in the Federal Reserve Act that says top officials can only be fired "for cause," a framework the courts will have to define for the first time. What they're saying: "Trump's conception of 'cause' has no limiting principle; it would allow him to remove any Federal Reserve Board member with whom he disagrees about policy based on chalked up allegations," Lowell writes in the complaint.Catch up quick: Trump on Monday posted a letter to Truth Social that ordered the removal of Cook from office, citing "sufficient cause to remove you from your position."In a statement hours later, Cook — initially appointed by Biden in 2022 — said she would not resign: "President Trump purported to fire me 'for cause' when no cause exists under the law, and he has no authority to do so." Pulte, claiming to have evidence that Cook falsified bank documents to acquire more favorable loan terms for a mortgage, referred the allegation to the Department of Justice.The bottom line: How Cook's suit evolves will determine the extent to which Trump — and future U.S. presidents — can meddle with the nation's central bank, long considered to be insulated from politics.Editor's note: This story has been updated with details from the suit.

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