Wall Street opened on a downbeat note Tuesday, as President Donald Trump called to fire Federal Reserve Governor Lisa Cook. In early trading, the Dow Jones Industrial Average (.DJI) dropped 45.6 points, or 0.10%, settling at 45,236.83. Meanwhile, the S&P 500 (.SPX) fell 3.8 points, or 0.06%, to 6,435.49, and the Nasdaq Composite (.IXIC) dropped 5.7 points, or 0.03%, to 21,443.63.
President Donald Trump announced Monday that he had fired Federal Reserve Board Governor Lisa Cook, an unprecedented escalation of his ongoing criticisms of the central bank and its decision not to cut interest rates.
Trump posted a termination letter on Truth Social, citing allegations made by Federal Housing Finance Agency Director Bill Pulte. Pulte had accused Cook of making false statements on mortgage applications, a claim that led the Department of Justice to open an investigation just four days earlier.
Cook responded swiftly, rejecting Trump’s claim and asserting that he lacks the authority to remove her from office.
“President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” said Cook in a statement Monday. “I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
Appointed by President Joe Biden, Cook is the first Black woman to serve on the Federal Reserve Board. She has not been charged with any crime and has retained prominent defense attorney Abbe Lowell to represent her.
Lowell sharply criticised Trump’s actions. “President Trump has taken to social media to once again ‘fire by tweet,’ and once again his reflex to bully is flawed and his demands lack any proper process, basis, or legal authority,” he said. “We will take whatever actions are needed to prevent his attempted illegal action.”
Legal experts say Federal Reserve governors can only be removed “for cause,” a high legal bar that typically requires serious misconduct and must be executed through established legal channels.