Trump moves to oust Fed governor Lisa Cook, prompting legal challenge

President Donald Trump announced late Monday that he was removing Federal Reserve governor Lisa Cook from the central bank, triggering an immediate legal challenge and prompting investors to reassess risk even as markets broadly held steady and bullion prices remained near recent highs. Cook filed suit this week seeking an emergency injunction to block the dismissal, and a federal judge in Washington is set to hear arguments on the request at 10 a.m. on Friday.

Trump said he was dismissing Cook for cause, citing a criminal referral from Federal Housing Finance Agency Director Bill Pulte that alleges she misrepresented information on mortgage applications in 2021. Cook and her lawyers contend the allegations are unproven, that the conduct occurred before she joined the Fed and therefore does not constitute legal cause for removal, and that the president lacks authority to oust a Senate confirmed governor without due process. "I will not resign," Cook said in a statement released through her attorneys. Her legal team, led by Abbe Lowell, called the president's action unsupported by law and pledged to seek judicial relief.

The Fed itself publicly emphasized the statutory...