Unprecedented: Does President Trump have the power to fire a Fed governor?

(Dan Tri) - President Trump has just announced the dismissal of Fed Governor Lisa Cook due to her involvement in mortgage fraud allegations. Does the US President have the right to fire a Fed governor?

US President Donald Trump has just posted on the social network Truth Social a document announcing the dismissal of Federal Reserve Governor Lisa Cook.

"By authority granted to you by Article II of the United States Constitution and the Federal Reserve Act of 1913, as amended, I am removing you from your position on the Federal Reserve Board, effective immediately," Trump said.

Observers said the move was unprecedented and could affect the independence of the US central bank.

“President Trump said he fired me for cause, when in fact there was no legal basis for that, and he had no authority to do so,” said Fed Governor Lisa Cook.

"I will not resign and will continue to carry out the mission of helping the US economy as I have done since 2022," Ms. Cook affirmed.

Ms. Lisa Cook at a Senate hearing in Washington in 2022 (Photo: Reuters).

Under the Federal Reserve Act, Congress has limited the US President's unilateral power to fire Fed governors, allowing it only in cases of misconduct or neglect of duty.

In the document announcing the dismissal of Fed Governor Lisa Cook, President Trump reiterated the content of the petition for prosecution that the director of the US Federal Housing Finance Agency Bill Pulte sent to Attorney General Pam Bondi on August 15.

Pulte alleged that Cook listed her permanent residence as an apartment in Atlanta, despite having previously taken out a mortgage on a home in Michigan and claiming it as her primary residence. Pulte added that the FHFA has documents documenting Cook’s “mortgage fraud.”

According to President Trump, the Fed has an important role in setting interest rates, managing reserves and member banks. The American people need to be assured that they can trust Fed members to keep their policy-setting duties.

“I learned through the media that FHFA Director William Pulte posted on social media about turning over a criminal record related to a mortgage loan four years ago, before I joined the Fed,” Cook said last week. “I take any questions about my financial history seriously and provide accurate information.”

The Fed Board of Governors consists of seven members appointed by the US president and confirmed by the Senate, each serving a non-reappointment term of 14 years. The chairman and vice chairman of the board are also appointed by the president from among the governors and serve a four-year term, but can be reappointed multiple times.

The Fed is also one of the few central banks in the world that is not subject to any government control or decision-making. Because of its independent role, the Fed's decisions are primarily for the benefit of the people and the community.

Observers say that if Ms. Cook resigns or is fired, Mr. Trump will be able to appoint a replacement and ensure that the majority of members of the Fed Board of Governors share his views on monetary policy.

Previously, President Trump has also repeatedly criticized Fed Chairman Jerome Powell, whose term ends in May 2026, for not accepting interest rate cuts as well as the agency's infrastructure renovation costs.

Source: https://dantri.com.vn/kinh-doanh/chua-co-tien-le-lieu-tong-thong-trump-co-quyen-sa-thai-thong-doc-fed-20250826130715186.htm