Fed governor Cook says she won't resign after Trump firing

What they're saying: Trump cited Article II of the Constitution and the Federal Reserve Act of 1913 to tell Cook she was "removed" from her position, "effective immediately," according to a letter the White House rapid response team shared on X.

The other side: "President Trump purported to fire me 'for cause' when no cause exists under the law, and he has no authority to do so," Cook said in a statement via Lowell & Associates, the law firm representing the Fed official.

• "I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022," Cook said.
• Abbe David Lowell, the lawyer who will work on Cook's behalf, said the firm "will take whatever actions are needed to prevent [Trump's] attempted illegal action," according to a statement.

The big picture: Trump's action turns what has been a theoretical — that he might seek to test the limits of the law by firing Fed governors, rather than just pressuring them — into a reality.

• It has never happened before, so no one knows how any wrangling over the legality of firing Cook will play out, nor what it will mean for the Fed in the meantime.
• The Federal Reserve Act allows the president to fire a Fed governor for cause, but it is unclear whether the fine details of years-old mortgage applications from before Cook became a governor are sufficient.

Driving the news: Bill Pulte, the head of the Federal Housing Finance Agency, who has helped lead the charge against the Fed, referred Cook to the Justice Department last week for criminal prosecution.

• Cook said in a statement at the time that she had "no intention of being bullied to step down from my position because of some questions raised in a tweet" and that she was "gathering the accurate information to answer any legitimate questions and provide the facts."
• Asked by reporters on Friday about the president's threats to fire her, she declined to comment.

Between the lines: Pulte, who has been among the most outspoken among Trump officials about the Fed, alleged in a letter earlier this month that she "falsified bank documents and property records to acquire more favorable loan terms, potentially committing mortgage fraud."

• Lowell, Cook's lawyer, is also representing New York Attorney General Letitia James, whom the Trump administration has also accused of mortgage fraud.

Threat level: Trump has pressured the Fed to slash interest rates, as the White House tries to install its own officials who will promote such an effort.

• The White House first tried to build a case against Fed chair Jerome Powell over the central bank's handling of building renovations. Then they took aim at Cook.

Context: Cook's term was not supposed to expire until 2038.

• The Biden appointee is the first Black woman to serve as a Fed governor.
• "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.  

By the numbers: Financial markets had a nervous reaction to the news, with longer-term U.S. Treasury yields rising, safe-haven gold spiking and the dollar dipping. Stock futures fell as well.

The bottom line: If the White House is successful in ousting Cook, it would be the second vacancy in less than a month, handing Trump another opportunity to shape the influential group of officials.

• Adriana Kugler resigned earlier this month. The White House nominated Stephen Miran, the chair of the Council of Economic Advisers, to step in until the term expires in January.

Go deeper: Democrats erupt as Trump moves to fire Fed governor Lisa Cook

Editor's note: This story has been updated with comment from Federal Reserve governor Lisa Cook and lawyer Abbe David Lowell, and with the latest market reactions.