WASHINGTON, D.C. — President Donald Trump has moved to replace Federal Reserve Governor Lisa Cook with his economic adviser Stephen Miran, following her controversial ouster on Monday, August 25, 2025, as reported by The Guardian. The unprecedented action, citing unconfirmed allegations of mortgage fraud, has intensified debates over the Federal Reserve’s independence, with Cook vowing to sue to retain her position.
Trump’s decision to remove Cook, the first Black woman on the Fed’s Board of Governors, stems from a criminal referral by Federal Housing Finance Agency Director William Pulte. The referral alleges Cook falsely declared two properties—in Michigan and Georgia—as primary residences in 2021 to secure favorable loan terms. “There is sufficient reason to believe you may have made false statements on one or more mortgage agreements,” Trump wrote in a letter posted on Truth Social, claiming authority under the Federal Reserve Act of 1913. Cook, appointed by President Joe Biden in 2022 for a term until 2038, countered, “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so.”
Cook’s attorney, Abbe Lowell, announced plans to file a lawsuit, arguing, “His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis.” Legal experts, including Columbia Law’s Lev Menand, question the validity of Trump’s action, noting that the Federal Reserve Act requires “for cause” removal, typically malfeasance, and Cook faces no criminal charges. The Supreme Court’s May 2025 ruling described the Fed as a “uniquely structured, quasi-private entity,” suggesting a high bar for such dismissals.
During a cabinet meeting on Tuesday, Trump hinted at Miran as a potential replacement, stating, “We have some very good people for that position. I think, maybe in my own mind, I have somebody that I like.” Miran, already nominated to fill another vacant Fed seat, could give Trump a 4-3 majority on the seven-member board if confirmed. Key implications include:
- Potential shift in Fed policy toward Trump’s push for lower interest rates.
- Legal battles that may reach the Supreme Court over Fed independence.
- Market uncertainty, with the dollar index down 0.3% post-announcement.
As Cook’s lawsuit looms, the clash threatens to reshape the central bank’s autonomy, with critics like Senator Elizabeth Warren calling it “an authoritarian power grab.”
Source: The Guardian
