Trump’s Attempt to Fire the Fed’s Lisa Cook Risks Global Economic Stability

In his monthslong battle to take control of the Federal Reserve, President Trump has tried threats, name-calling and — in one particularly memorable news conference with a hard-hat-wearing Jerome H. Powell — public humiliation. But he has always stopped short of the step that advisers warned could roil financial markets and upend a pillar of the global economy: attempting to fire a Fed official.

On Monday evening, he took that leap.

Mr. Trump’s target was not Mr. Powell, the Fed chair, at least for now. Instead it was Lisa Cook, one of the Fed’s six other governors. The president, in a letter, said he was removing Ms. Cook “for cause,” citing allegations of mortgage fraud. Ms. Cook has not been charged with any crime.

But Mr. Trump has made little secret of his true aim. He wants to control the Fed.

Janet L. Yellen, who was Mr. Powell’s immediate predecessor as Fed chair and later served as Treasury secretary under President Joseph R. Biden Jr., said she was “utterly alarmed” by the move.

“I feel this is now turned into an all-out assault on the Federal Reserve and an attempt by President Trump to really gain control over decision-making at the Fed,” she said.

Peter Conti-Brown, an expert on Fed governance at the University of Pennsylvania, said Ms. Cook’s firing, if successful, would mark “the end of central bank independence as we know it.”

In the short term, Mr. Trump’s attempt to fire Ms. Cook creates more uncertainty at a critical moment for Fed policy. Ms. Cook has vowed to fight her ouster, and on Tuesday her lawyer promised to file a lawsuit challenging what he called an “illegal action.” Legal experts say she has a strong case given that she hasn’t been convicted of a crime and the fraud allegations involve her private conduct, not her work at the Fed.