Trump fires first Black Fed governor Lisa Cook in unprecedented move, markets wobble

U.S. stock futures slipped on Tuesday after President Donald Trump announced the removal of Federal Reserve Governor Lisa Cook, the first Black woman to serve on the central bank’s board, an extraordinary move seen as a major assault on the Fed’s independence.

Dow Jones Industrial Average futures dropped 45 points, or 0.1%, while S&P 500 and Nasdaq-100 futures also fell by 0.1% each, according to a report by CNBC.

The U.S. dollar weakened 0.3% against major currencies, and Treasury yields steepened, reflecting investor bets that short-term rates may decline while long-term inflation risks rise under a politicized Fed.

Trump, posting a letter on Truth Social late Monday, accused Cook of making “false statements” on two mortgage applications, saying the discrepancy constituted grounds for removal. “It is inconceivable that you were not aware of your first commitment when making the second,” Trump wrote, alleging she declared two different properties as her primary residence within weeks of each other.

Cook, appointed by former President Joe Biden in 2022, rejected the accusations and vowed to stay. “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” she said in a statement. Her attorney, Abbe David Lowell, called the move “illegal” and pledged to challenge it in court.

The Federal Reserve Act permits a president to dismiss a governor only “for cause,” but does not define the term, making a protracted legal fight likely. The Fed has not yet commented on the decision.

The firing comes as Trump intensifies pressure on the central bank to slash interest rates. He has repeatedly berated Fed Chair Jerome Powell, whose term ends in May, and even floated removing him. If Trump succeeds in replacing Cook and filling another recent vacancy, he could secure a 4-3 majority on the seven-member board.

European stocks also dipped on the news, and Wall Street is coming off a weak session, with the Dow down 0.8% Monday. Investors now await Nvidia’s earnings Wednesday and upcoming inflation data for fresh clues on the Fed’s next steps.