US President Donald Trump took a historic step by announcing the immediate dismissal of Federal Reserve Governor Lisa Cook amid allegations of real estate fraud. Trump cited a criminal referral dated August 15 from the Federal Housing Finance Agency to the Justice Department as sufficient cause for her removal. Cook rejected the dismissal, stating there was no legal basis and refused to resign, appointing prominent attorney Abbe Lowell to defend her. Legal experts argue the firing lacks procedural validity and expect a broad legal battle that could reach the Supreme Court, potentially destabilizing financial markets. Experts warn that removing Cook could undermine the Federal Reserve’s political independence, crucial for combating inflation through unpopular measures like interest rate hikes. The move has already caused slight declines in stock futures and the dollar.

Cook, appointed by President Biden in 2022 as the first Black woman governor, faces unprecedented presidential dismissal, raising concerns about the future autonomy of the US central bank.