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President Donald Trump on Monday said he has fired Federal Reserve Governor Lisa Cook, according to a letter addressed to her posted on his social media — the first instance of a president firing a central bank governor in the central bank’s 111-year history.
The unprecedented move represents a significant escalation of the president’s battle against the Fed, which he has blamed for taking too long to lower interest rates.
Cook has recently come under fire by Trump and members of his administration for allegedly committing mortgage fraud. The Justice Department has said it plans to investigate those allegations first raised by Federal Housing Finance Director Bill Pulte.
The Fed declined to comment on the news.
It’s unclear whether Trump has the legal authority to fire Cook over these allegations. The law specifies that a president may only remove members of the Fed’s board “for cause” – though what merits a for-cause firing has not been explicity defined.
While the firing may be challenged in courts, even going up to the Supreme Court, Trump’s firing of Cook puts the central bank of the world’s largest economy in uncharted waters.
For example, it’s unknown whether Cook would have to leave the Fed’s board immediately, and if so, will Trump have the opportunity to nominate someone else to fill her seat.
The Fed’s next monetary policy meeting is less than a month away, over September 16 and 17.
Last week Cook released a statement saying she would not be “bullied” into resigning.
“I have no intention of being bullied to step down from my position because of some questions raised in a tweet. I do intend to take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions and provide the facts,” she said in that statement.
This is a developing story and will be updated.