U.S. President Donald Trump has declared Federal Reserve Governor Lisa Cook "removed effective immediately," citing unproven allegations that she misrepresented her primary residence in two 2021 mortgage applications. In a 25-26 Aug letter the president argued that the disputed filings constitute the “gross negligence” needed to satisfy the Federal Reserve Act’s rarely used “for-cause” removal standard. Cook, who was confirmed in 2022 to a 14-year term and is the first Black woman on the Fed’s board, rejected the dismissal, saying the president “has no authority” to fire her and that she will sue to keep her seat. She remains on the job while her lawyers prepare a complaint expected to be filed in Washington, D.C. The confrontation marks the first time a president has sought to oust a sitting Fed governor and could clarify whether the White House can remove central-bank officials for alleged misconduct unrelated to monetary policy. Legal scholars say the case is likely to reach the Supreme Court because the Fed’s governing statute does not define “cause,” and past precedent on independent agencies is mixed. If Trump prevails he would gain a fourth ally on the seven-member board, potentially reshaping the Federal Open Market Committee ahead of decisions on interest-rate cuts that the president has publicly demanded. The White House has also urged Cook to take unpaid leave while the dispute proceeds; the Fed says it will follow any court order. Former Fed Chair Janet Yellen warned in a Financial Times commentary that the move is "profoundly dangerous" and could undermine the central bank’s credibility with investors. Markets so far have shown limited reaction, but economists note that uncertainty over the Fed’s independence could raise long-term borrowing costs if confidence erodes.