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| Can Trump fire Fed Governor Lisa Cook and why does he want to? | Can Trump fire Fed Governor Lisa Cook and why does he want to? |
| (about 20 hours later) | |
| Federal Reserve governor Lisa Cook will seek an emergency temporary restraining order in a federal court on Friday to block Donald Trump from firing her while a lawsuit over the president's action plays out. | |
| President Trump has demanded the removal of Cook, a move that escalates his long-running feud with the institution. | |
| Late on Monday, he posted on his Truth Social account a letter addressed to Lisa Cook, saying she was being removed from the Federal Reserve Board of Governors due to mortgage fraud allegations. | Late on Monday, he posted on his Truth Social account a letter addressed to Lisa Cook, saying she was being removed from the Federal Reserve Board of Governors due to mortgage fraud allegations. |
| Cook filed a lawsuit to challenge the move, asking the court to declare Trump's firing order "unlawful and void". The potential legal battle has significant implications for the US central bank's autonomy. | |
| There has been an outcry from Democrats, who say it amounts to unprecedented political interference by Trump. | There has been an outcry from Democrats, who say it amounts to unprecedented political interference by Trump. |
| Who is Lisa Cook and what does she do? | Who is Lisa Cook and what does she do? |
| Cook was appointed as governor of the Federal Reserve in 2022 by Democratic President Joe Biden, becoming the first African American to serve in the role. Her term was due to end in 2038. | Cook was appointed as governor of the Federal Reserve in 2022 by Democratic President Joe Biden, becoming the first African American to serve in the role. Her term was due to end in 2038. |
| She previously served on Barack Obama's Council of Economic Advisers and worked at the US Treasury. | She previously served on Barack Obama's Council of Economic Advisers and worked at the US Treasury. |
| There are seven governors on the board of the Fed and they play a key role in setting the monetary policy of the US. | There are seven governors on the board of the Fed and they play a key role in setting the monetary policy of the US. |
| They make up the majority of the committee that decides the level of US interest rates and aims to keep prices stable and unemployment as low as possible. | They make up the majority of the committee that decides the level of US interest rates and aims to keep prices stable and unemployment as low as possible. |
| Cook has voted in recent months to keep interest rates on hold this year. | Cook has voted in recent months to keep interest rates on hold this year. |
| Full story: Trump orders removal of Cook | Full story: Trump orders removal of Cook |
| Fed governor says she won't be 'bullied' | Fed governor says she won't be 'bullied' |
| Powell boosts expectation of US rate cut | Powell boosts expectation of US rate cut |
| What has Trump accused Lisa Cook of? | What has Trump accused Lisa Cook of? |
| In his Truth Social post, the president cited allegations that Cook may have falsified records to obtain a mortgage. | In his Truth Social post, the president cited allegations that Cook may have falsified records to obtain a mortgage. |
| He said she signed two documents, two weeks apart, attesting that two homes in different states were both her primary residence. | He said she signed two documents, two weeks apart, attesting that two homes in different states were both her primary residence. |
| "It is inconceivable that you were not aware of your first commitment when making the second. It is impossible that you intended to honor both," he wrote. | "It is inconceivable that you were not aware of your first commitment when making the second. It is impossible that you intended to honor both," he wrote. |
| CNN has obtained and reviewed the mortgage documents in question and found she did claim two primary residences but it is unclear whether she informed either lender of the fact. | CNN has obtained and reviewed the mortgage documents in question and found she did claim two primary residences but it is unclear whether she informed either lender of the fact. |
| Cook has not been charged with any wrongdoing and in a statement she said she would fight her dismissal because Trump did not have just cause to fire her. | Cook has not been charged with any wrongdoing and in a statement she said she would fight her dismissal because Trump did not have just cause to fire her. |
| What does the Fed do? | What does the Fed do? |
| As the central bank of the US, the Federal Reserve is responsible for running the nation's monetary policy, promoting stability in the financial system, regulating institutions and other tasks. | As the central bank of the US, the Federal Reserve is responsible for running the nation's monetary policy, promoting stability in the financial system, regulating institutions and other tasks. |
| One of the most visible activities it undertakes is to set interest rates. This has a big impact on the nation's financial conditions by influencing how much money people can borrow. | One of the most visible activities it undertakes is to set interest rates. This has a big impact on the nation's financial conditions by influencing how much money people can borrow. |
| The Fed functions as a federal agency and is considered to be independent within government - its decisions do not require the president's approval, though it is accountable to Congress. | The Fed functions as a federal agency and is considered to be independent within government - its decisions do not require the president's approval, though it is accountable to Congress. |
| Can Trump actually fire her? | Can Trump actually fire her? |
| This question could become the subject of an intense legal battle. | This question could become the subject of an intense legal battle. |
| The Federal Reserve Act does not give the president license to remove a Fed official at will but, as Trump noted in his letter to Cook, it does allow him to do so "for cause". | The Federal Reserve Act does not give the president license to remove a Fed official at will but, as Trump noted in his letter to Cook, it does allow him to do so "for cause". |
| Trump cited a "criminal referral" against Cook - after his ally, the housing finance regulator, recently called for Cook to be investigated for mortgage fraud. But it is not clear whether an investigation has been opened, and Cook has not been charged with any crime. | Trump cited a "criminal referral" against Cook - after his ally, the housing finance regulator, recently called for Cook to be investigated for mortgage fraud. But it is not clear whether an investigation has been opened, and Cook has not been charged with any crime. |
| As well as Cook's denial that there is any cause to sack her, legal experts have shown scepticism. When announcing that a case would be filed over the issue, Cook's lawyer said the effort by Trump "lacks any factual or legal basis". | As well as Cook's denial that there is any cause to sack her, legal experts have shown scepticism. When announcing that a case would be filed over the issue, Cook's lawyer said the effort by Trump "lacks any factual or legal basis". |
| In a statement of its own, the Fed highlighted that there was a high bar for a president to remove a governor for a reason: "Long tenures and removal protections for governors serve as a vital safeguard, ensuring that monetary policy decisions are based on data, economic analysis, and the long-term interests of the American people." | In a statement of its own, the Fed highlighted that there was a high bar for a president to remove a governor for a reason: "Long tenures and removal protections for governors serve as a vital safeguard, ensuring that monetary policy decisions are based on data, economic analysis, and the long-term interests of the American people." |
| Market reaction to Trump's move has been relatively muted so far - as investors appear to be waiting to see if the sacking actually comes to pass. However, there was a sell-off of long-term US government bonds on Tuesday, hinting that some investors were concerned about the Fed's independence. | Market reaction to Trump's move has been relatively muted so far - as investors appear to be waiting to see if the sacking actually comes to pass. However, there was a sell-off of long-term US government bonds on Tuesday, hinting that some investors were concerned about the Fed's independence. |
| Why does Trump want lower interest rates? | Why does Trump want lower interest rates? |
| Trump has spent much of his second presidency putting pressure on the Fed, demanding that Powell cut interest rates to lower the cost of borrowing for American businesses and consumers. The target range is currently 4.25 to 4.5%. | Trump has spent much of his second presidency putting pressure on the Fed, demanding that Powell cut interest rates to lower the cost of borrowing for American businesses and consumers. The target range is currently 4.25 to 4.5%. |
| Central banks typically cut rates in an effort to boost growth. But there is a balancing act, because higher interest rates help to keep inflation in check. Tackling inflation is another Trump priority. | Central banks typically cut rates in an effort to boost growth. But there is a balancing act, because higher interest rates help to keep inflation in check. Tackling inflation is another Trump priority. |
| Lower rates can also help US exporters and easing trade deficits is a central plank of Trump's economic policy. | Lower rates can also help US exporters and easing trade deficits is a central plank of Trump's economic policy. |
| Powell has so far steadfastly refused to reduce rates since Trump took office, but has hinted at a cut in September. | Powell has so far steadfastly refused to reduce rates since Trump took office, but has hinted at a cut in September. |