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Ms. Cook (right) is one of seven members of the Fed’s board of governors and the first African-American woman to serve in the role.

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President Donald Trump has announced that he will immediately remove Federal Reserve Governor Lisa Cook, a serious escalation in his confrontation with the US central bank.

In a statement posted on his social media platform Truth Social, Mr. Trump posted a letter to Ms. Cook, in which he announced his decision to remove her from the board of the Central Bank with immediate effect.

The US leader said he had “sufficient reason” to believe Ms Cook had misrepresented the status of her mortgage to get a lower interest rate, and cited constitutional rights that Mr Trump said allowed him to remove Ms Cook.

In response, Ms. Cook said that Mr. Trump did not have the authority to fire her, and that she would not resign.

“President Trump intentionally fired me ‘for cause’ when there was no reason under the law, and he had no authority to do so,” Cook said in a statement.

“I will not resign. I will continue to do my part to support the US economy as I have done since 2022,” the Fed governor added. The Fed has yet to comment on President Trump ‘s announcement , which was made late on August 25. In recent weeks, Mr Trump has put increasing pressure on the Fed – especially Chairman Jerome Powell – because he believes the central bank is not cutting interest rates . He has repeatedly raised the possibility of firing Mr Powell. The decision to fire Ms. Cook, one of seven members of the Fed’s Board of Governors and the first African-American woman to hold the position, is considered unprecedented in the central bank’s 111-year history. The decision also raises legal questions, with experts saying the White House would need to prove — possibly in court — that it had a legitimate reason to fire Ms Cook. According to Mr. Trump’s letter, Ms. Cook signed a document confirming that a property in Michigan will be her primary residence for the next year.

“Two weeks later, she signed another document for a property in Georgia, stating that it would be her primary residence for the next year,” the president said.

“It is hard to believe that she did not remember her first commitment when she signed the second one,” he wrote.

Last week, the US President called on Ms. Cook to resign over allegations of mortgage fraud, stemming from a public letter from the head of the US Federal Housing Finance Agency (FHFA) – Mr. Bill Pulte, a Trump ally – to Attorney General Pam Bondi.

The Housing Finance Authority called the letter a “criminal inquiry” and called on the Justice Department to investigate. It is unclear whether an investigation has been opened.

In a statement to the BBC last week, Ms Cook said she only learned of the allegations through the media, and that they stemmed from a mortgage application she submitted four years ago, before joining the central bank.

“I have no intention of being forced to resign just because of some questions raised on social media,” she said.

“However, I will take seriously any questions about my financial history as a member of the Federal Reserve, so I am gathering accurate information to answer any legitimate questions and provide the truth.”

If Ms. Cook or the Fed were to challenge Mr. Trump’s decision to fire her, experts say it could spark a confrontation between the central bank and the White House. The Federal Reserve has operated independently of the U.S. government since 1951.

Meanwhile, Mr Trump has become increasingly hostile to Mr Powell, calling him a “dumb” and “stubborn fool” because the Fed chairman has not backed the president’s calls for a sharp and rapid cut in lending rates.

But last week, Mr. Powell raised expectations that interest rates would be cut in September. Speaking to central bank governors in Jackson Hole, Wyoming, Mr. Powell also argued that the inflationary impact of Mr. Trump’s tariffs would be temporary.

The US dollar weakened against major currencies in Asian trade on August 26 as investors bet that Cook’s replacement would push for further interest rate cuts.

Central banks often cut interest rates to boost growth when there are signs that the economy is slowing and employment is falling, as it makes it cheaper for consumers and businesses to borrow.

However, boosting growth needs to be balanced with controlling rising prices. Higher interest rates can help control inflation, which is often seen as a top priority for central banks.

Mr Powell said the impact of tariffs on US consumer prices was now “clear”, but he also said a “reasonable” argument could be made that inflation would be “relatively short-lived – just a one-off change in prices”.

He said it would take time for price changes to be fully reflected in the economy, but he played down the possibility of inflation eating into the US economy due to wage pressures or rising inflation expectations.

Because interest rates are already “restrictive” – high enough to slow economic activity – Mr Powell said “changes in the balance of risks may justify an adjustment in the stance of our policy”.

Previously, Mr. Trump also threatened to fire Mr. Powell but has not yet done so.

Mr. Powell was appointed by Mr. Trump in late 2017 and his term as Fed Chairman will end in about nine months.