Federal Reserve Governor Lisa Cook is suing the Trump administration in an effort to overturn the president’s attempt to fire her, launching an unprecedented legal battle that could significantly reshape the Fed’s longstanding political independence. No president has sought to fire a Fed governor in the institution’s 112-year history until President Donald Trump posted a letter on his Truth Social media platform late Monday saying that Cook was fired. Trump said the reason for her removal were allegations that she committed mortgage fraud in 2021, before she was appointed to the board.

Bill Pulte, the country's top housing regulator, has been using his position to target President Trump's political enemies. He has accused them of mortgage fraud and encouraged investigations. This week, Trump used Pulte's allegations to attempt to fire Lisa Cook from the Federal Reserve board of governors. Cook plans to fight her removal. Pulte has also targeted other Democrats but ignored similar cases involving Republicans. His actions align with Trump's efforts to pressure opponents using federal power. Pulte, a housing industry scion, has a history of political donations to Trump and his allies.

Stocks closed higher on Wall Street after an afternoon push left major indexes just below their recent records. The S&P 500 rose 0.4% Tuesday after drifting between small gains and losses for much of the day. The Dow Jones Industrial Average added 0.3%, and the Nasdaq composite rose 0.4%. Boeing rose 3.5% after Korean Air announced a $50 billion deal with the company that includes buying more than 100 aircraft. Dish Network parent EchoStar surged 70.2% after AT&T said it will buy some of its wireless spectrum licenses in a $23 billion deal. Treasury yields held steady.

Lisa Cook made headlines three years ago when she became the first Black woman to serve on the Federal Reserve’s Board of Governors, one of the most powerful financial institutions in the world. On Monday, President Donald Trump said he was firing Cook, who has worked in the Clinton, G.W. Bush and Obama administrations. Critics say accusations of mortgage fraud against Cook are being used as a tool by Trump to gain control of the Federal Reserve, one of the few remaining independent agencies in Washington. The allegations were raised by Bill Pulte, a Trump appointee who heads the Federal Housing Finance Agency. He has raised similar allegations against Sen. Adam Schiff, D-Calif. and New York Attorney General Letitia James.

Trump fires Fed Governor Lisa Cook amid mortgage fraud allegations, opening new front in fight over central bank.