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Federal Reserve Governor Lisa Cook is not stepping down despite President Donald Trump saying in a letter that he had “removed” her from her post “effective immediately.” The remarkable development, which raises questions about presidential power and Federal Reserve independence, follows an escalation in Trump’s attack against her.

The president shared the letter he sent to Cook on Truth Social, five days after first calling for her to resign on the platform. In the letter, Trump said that he was acting under the authority of the U.S. Constitution and the Federal Reserve Act of 1913, which grants presidents the power to remove governors from the Fed’s Board “for cause.” Trump wrote that he had “determined that sufficient reason exists” to believe Cook “made false statements on one or more mortgage agreements.”

“I have determined that faithfully enacting the law requires your immediate removal from office,” Trump wrote in the letter, which he later shared on Truth Social.

Trump’s allegations against Cook come from Bill Pulte, a Trump appointee to an agency that regulates Fannie Mae and Freddie Mac. In a lengthy statement to the Federal Reserve, Pulte accused Cook of falsely claiming two primary residences in Ann Arbor and Atlanta in 2021 to get more favorable mortgage terms. Pulte appeared on Fox Business’ “Mornings with Maria” on Thursday to discuss the allegations.

“It’s very odd to see people try to twist back way sideways and upside down to justify mortgage fraud,” Pulte said. “This is a very serious crime. Mortgage fraud carries up to 30 years in prison. I believe the president has ample cause to fire Lisa Cook. Whether he wants to do that or not is entirely up to the president. However, we will go where mortgage fraud is. If mortgage fraud is with a Republican or Democrat, it doesn’t matter—if you commit mortgage fraud in President Trump’s America, we’re going to come after you. And Lisa Cook is no exception to that.”

Pulte made a criminal referral to the Justice Department on Aug. 15, accusing Cook of falsifying bank documents and property records. The referral has yet to result in charges.

Cook was appointed to the Federal Reserve Board in 2022 by then-President Joe Biden. She quickly pushed back against Trump’s assertion that he had the power to dismiss her. “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so. I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022,” Cook said in a statement provided to Fox News Digital.

Cook has hired Abbe Lowell, the high-powered attorney who has represented Hunter Biden, New York Attorney General Letitia James, Jared Kushner, and Ivanka Trump. Lowell was not shy in his response to Trump. “President Trump has taken to social media to once again ‘fire by tweet,’ and once again his reflex to bully is flawed and his demands lack any proper process, basis, or legal authority. We will take whatever actions are needed to prevent his attempted illegal action,” Lowell said.

FOX Business reached out to the Federal Reserve for comment, but officials did not immediately respond.

Lowell later revealed that he would be filing a lawsuit on Cook’s behalf to formally challenge Trump’s effort to remove her from her position. “President Trump has no authority to remove Federal Reserve Governor Lisa Cook. His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis. We will be filing a lawsuit challenging this illegal action,” he said.

Democrats Condemn Trump Effort as ‘Authoritarian Power Grab’

Leading Democrats leapt to Cook’s defense, calling Trump’s effort both unconstitutional and politically motivated. House Minority Leader Hakeem Jeffries, D-N.Y., Sen. Elizabeth Warren, D-Mass., and Rep. Jamie Raskin, D-Md., all released statements on the matter.

Raskin told Axios, “What an outrage and a scandal. This is the big one constitutionally.”

Warren called the attempt “an authoritarian power grab” and argued, “Trump is desperately looking for a scapegoat to cover for his own failure to lower costs for Americans, and firing Lisa Cook is his latest move.”

Jeffries echoed Warren, insisting there is not “a shred of credible evidence that she has done anything wrong.” He also directly took on Trump: “To the extent anyone is unfit to serve in a position of responsibility because of deceitful and potentially criminal conduct, it is the current occupant of the White House. The American people are not buying your phony projection and slander of a distinguished public servant.”

The move comes as Trump has also clashed with Federal Reserve Chair Jerome Powell over the central bank’s interest rate policy. The president and his allies have repeatedly urged the Fed to lower rates to stimulate the economy and reduce the cost of servicing the national debt, which now exceeds $37 trillion.

The power struggle has raised questions about the limits of presidential power over the Federal Reserve. While the Federal Reserve Act allows the president to remove governors “for cause,” legal experts argue that such a move requires a lawful justification and process—something that Cook and her attorney insist does not exist.

With Cook refusing to step down, Lowell promising legal action, and Democrats lining up in opposition, the controversy threatens to devolve into a protracted legal and political fight that could test the limits of presidential authority over one of the most important financial institutions in the country.