President Donald Trump removed Federal Reserve Governor Lisa Cook from office on Monday, saying in a letter posted to his Truth Social account that "deceitful and potentially criminal conduct" in mortgage agreements left him with "sufficient cause" to dismiss her, effective immediately. The action marks the first time in the central bank’s 111-year history that a sitting governor has been fired by a president. Under the Federal Reserve Act, governors may be removed only "for cause," a standard usually interpreted as serious misconduct. Legal scholars expect Cook to challenge the move, setting up a test of the Fed’s independence. Trump’s letter cites a criminal referral from Federal Housing Finance Agency Director Bill Pulte alleging Cook claimed two different properties as her primary residence within weeks of each other, a practice that can secure more favorable loan terms and is considered mortgage fraud. The Justice Department has said it will review the allegations; neither Cook nor the Fed has commented publicly. Cook, a Democrat appointed by President Joe Biden in 2022, had rebuffed Trump’s earlier call to resign. Her ouster leaves a second vacancy on the seven-member Board of Governors, giving the White House an additional opportunity to reshape the central bank after already nominating economist Stephen Miran for a separate open seat. Financial markets reacted swiftly: the Bloomberg Dollar Spot Index slipped about 0.2% while the yen and euro strengthened, gold rose roughly 0.4%, and Japanese and European equity futures fell. Traders said the shake-up raises questions about the Fed’s policy autonomy and may increase bets on rate cuts later this year.