Fed Independence Litigation Commences

On August 28, 2025, Federal Reserve Governor Lisa Cook filed a lawsuit (available here) in the U.S. District Court for the District of Columbia (the “District Court”) against President Trump, the Board of Governors of the Federal Reserve System (the “Board”), and Chairman Powell. Cook challenges the recent attempt to remove her from the Board, which was initiated by President Trump on August 23 based on alleged false statements on two of her mortgage applications, in which she attested that both properties were her primary residence. President Trump asserted in his August 23 letter (available here) that this conduct amounted to “cause” under the Federal Reserve Act (“FRA”), thereby justifying her removal under the statute, which, among other things, governs the Federal Reserve, the membership of the Board, and the protections Board members have from removal from office.

Governor Cook’s termination earlier this week is by now well-known, and it comes amid a well-publicized campaign by President Trump and the administration to assert pressure on Chairman Powell and the Board—a campaign widely viewed as a direct assault on its independence. We generally assume familiarity with these issues and the importance of Fed independence, and we were among the first in the market to foreshadow this conflict when we issued a comprehensive report on Fed independence on Trump’s first full day in office back in January 2025.