Trump's bid to oust Fed governor Cook tests central bank independence

President Donald Trump’s effort to remove Federal Reserve governor Lisa Cook has touched off a legal and political fight over the independence of the United States central bank, with the Justice Department opening a criminal probe into mortgage fraud allegations and international figures warning of broader economic risks. The dispute, which erupted after Mr. Trump announced Cook’s dismissal in late August, has landed in federal court in Washington as Cook seeks to block her ouster.

Cook, the first Black woman to serve on the Fed’s sevenmember Board of Governors, sued the president last week, arguing that she can be removed only for cause and that the administration provided no hearing or opportunity to respond before firing her. Her lawyers have denied that she committed mortgage fraud, saying the questions relate to conduct before she joined the Fed and were disclosed during her 2022 confirmation vetting. The Justice Department has urged a judge to allow Cook’s immediate removal while litigation proceeds, and a court could issue a temporary ruling in the coming days.

The criminal inquiry follows referrals by Bill Pulte, head of the Federal Housing Finance Agency and a Trump...