President Donald Trump said late Monday he had fired Federal Reserve Governor Lisa Cook, alleging she falsely claimed two primary residences on 2021 mortgage applications. In a letter invoking the Federal Reserve Act’s “for cause” clause, Trump maintained the dismissal was effective immediately and told reporters he would accept any ensuing court ruling. Cook, the first Black woman to serve on the Fed’s board and confirmed for a term running to 2038, rejected the move. She asserted that no legal cause exists and that a president lacks authority to remove a sitting governor. Her lawyer, Abbe Lowell, said Cook will file a lawsuit in federal court to block what he called an “illegal” action. The Federal Reserve responded that governors may be removed only “for cause” and said the central bank will abide by any judicial decision. Cook’s participation in the Fed’s Sept. 16–17 policy meeting now hinges on the courts, which legal scholars say could ultimately be asked by the Supreme Court to define the limits of presidential power over independent agencies. If Trump succeeds, he would gain a four-to-three majority on the seven-member board—an outcome analysts say could shift future interest-rate decisions and widen concerns about the Fed’s political independence. Financial markets reacted cautiously on Tuesday, with Treasury yields edging higher as investors assessed the potential policy implications.