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The Fed is facing a direct clash with the White House and preparing for a courtroom showdown after Governor Lisa Cook filed a lawsuit against President Donald Trump, who claimed Monday that he had fired her over mortgage fraud allegations. The central bank said on Tuesday that it would follow whatever decision the courts hand down and made it clear it stands by Cook as she challenges her removal. This legal fight, which could land before both Congress and the Supreme Court, is now about whether Trump even has the power to fire a Senate-confirmed Fed governor. The central bank’s official statement said Lisa, through her attorney, would be “promptly challenging” Trump’s attempt in court and would seek a ruling to confirm her right to stay in office. That lawsuit is now in motion. Fed board confirms Lisa is staying as court decides her fate The Fed broke its silence Tuesday with a sharp reminder that only Congress, through the Federal Reserve Act, determines how and when a Fed governor can be removed. Governors serve long, fixed terms, and can only be taken off the board “for cause.” The central bank didn’t say whether Trump’s claim qualifies, but it warned that those protections exist for a reason: to stop monetary policy from being politicized. “Long tenures and removal protections for governors serve as a vital safeguard,” the Fed said, “ensuring that monetary policy decisions are based on data, economic analysis, and the long-term interests of the American people.” The central bank also doubled down on its commitment to remain independent and to carry out its duties “as established by law.” That includes promoting employment, maintaining stable prices, and ensuring a functioning financial system. Trump, speaking at the White House, told reporters he’s ready to let the courts settle this. “I…

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Filed under: News - @ August 26, 2025 11:29 pm