Personal cost of a political attack
The Federal Reserve governor Lisa Cook incurred more than $1.3m in legal and security fees after she was targeted by the Trump administration, newly filed ethics disclosures show. The vast majority of the costs were covered by two non-profit organisations: the State Democracy Defenders Fund, which paid $696,346, and Contina Impact, which provided $477,951 for legal services and an additional $143,908 for security. Three personal friends of Cook also contributed to her security expenses.
The disclosures, filed on Wednesday, detail the financial fallout from a campaign waged against Cook last summer as Donald Trump intensified his unprecedented pressure on the Federal Reserve to cut interest rates. Bill Pulte, then director of the Federal Housing Finance Agency — who is set to become acting US intelligence chief on Friday — accused Cook of mortgage fraud. In social media posts, Pulte claimed she had misled lenders by listing a second home as her primary residence on mortgage applications in 2021 in order to secure more favourable loan terms.
Cook, who was appointed by Joe Biden in 2022 and became the first Black woman to serve on the Federal Open Market Committee (FOMC), has strongly denied the allegations. She accused the administration of “cherrypicking” discrepancies and removing her for political reasons. Her legal team has argued that the claims lack merit and that Trump’s attempt to oust her was a pretext to clear her seat for a more politically aligned appointee.
Trump fired Cook from her role on the FOMC, where she was one of 12 voting members who set interest rates eight times a year. However, a federal court temporarily reinstated her. Her firing remains at the centre of a case before the US Supreme Court, which has yet to rule on whether the dismissal was legal. During a hearing in January, justices appeared sceptical of the brusque manner in which Trump removed her. The case is expected to be decided before the end of June.
Supreme Court to decide Fed’s independence
The Supreme Court case will test how the high court views the independence of the Federal Reserve from the White House. Congress created the central bank in 1913 with a unique structure designed to shield it from political influence, including long terms for appointed officials and a funding stream that does not come from Congress. Economists widely agree that an independent central bank, free from political pressure, is essential for maintaining a stable economy.
Past presidents have generally refrained from vocally criticising the Fed, but Donald Trump has been outspoken in his fury over the bank’s refusal to lower interest rates during his second term. The case specifically asks whether the president has the authority to remove a Federal Reserve governor “for cause” under the Federal Reserve Act. Legal scholars say the decision could have significant implications for the balance of executive power over independent agencies.
Meanwhile, Trump’s new pick for Fed chair, Kevin Warsh, has aligned himself with the president but holds only one of 12 votes on the board of governors. Warsh, a former Federal Reserve governor who served from 2006 to 2011, was nominated by Trump in March 2026 and confirmed by the Senate in May 2026, succeeding Jerome Powell. During his earlier tenure, Warsh was considered hawkish on interest rates, though his current views on monetary policy remain uncertain.
The economic backdrop has further complicated the picture. The ongoing war in Iran has driven rising inflation. Minutes from the Fed’s March 2026 meeting showed that a growing number of officials believe further interest rate hikes may be necessary if the conflict continues to push prices higher. After their latest meeting on Wednesday, members of the board signalled a possible rate increase before the end of the year to mitigate the inflationary impact. Some economists suggest that rate cuts could be delayed or that an actual rate hike might occur in 2026.
