Fed governor (or former Fed governor, depending on whom you ask) Lisa Cook filed a lawsuit overnight against President Donald Trump, which will be brought before a court for an emergency hearing later today.

Cook’s motion comes after President Trump posted on his social media site that he had written to the Federal Reserve governor “removing” her from her post, claiming she had made false statements on mortgage agreements. Trump alleged Cook claimed two primary residences (in Ann Arbor and Atlanta) in 2021 in order to secure better terms.

The Fed governor responded that she had no intention of being “bullied” out of her role, adding: “I do intend to take any questions about my financial history seriously as a member of the Federal Reserve, and so I am gathering the accurate information to answer any legitimate questions and provide the facts.”

Action has continued to ramp up on both sides, and will come to a head at 10 a.m. this morning in a hearing presided over by Judge Jia Cobb, an appointee of former President Joe Biden.

The emergency hearing this afternoon is specifically in response to one of the filings from Cook’s legal team, which is for a temporary restraining order (TRO) against the president.

The filing seen by Fortune reads: “Plaintiff Lisa D. Cook … respectfully requests that the Court issue an emergency temporary restraining order, to remain in effect until such time as the Court can further consider the merits of her claims declaring that President Trump’s August 25, 2025, attempted firing of Governor Cook is unlawful under the Federal Reserve Act … and that Governor Cook is still a member of the Federal Reserve Board.”

It also named Fed Chair Jerome Powell, barring him from “effectuating in any manner Governor Cook’s illegal purported removal from her position or in any way treating her as having been removed, or denying or obstructing her in accessing any of the benefits or resources of her Board position.” It adds: “This emergency relief is necessary due to the exigency of the circumstances and the irreparable nature of the injury that the temporary restraining order is intended to prevent.”

The filings also contain summonses: For Trump, the Board of Governors at the Fed, Chairman Powell, Attorney General Pam Bondi, and the Attorney’s Office for the District of Columbia.

The main motion against the president is laid out in a 24-page document, which “challenges President Trump’s unprecedented and illegal attempt to remove Governor Cook from her position, which, if allowed to occur, would be the first of its kind in the Board’s history.”

“Accordingly, Governor Cook seeks immediate declaratory and injunctive relief to confirm her status as a member of the Board of Governors, safeguard her and the Board’s congressionally mandated independence, and allow Governor Cook and the Federal Reserve to continue its critical work,” the motion adds.

“The president exercised his lawful authority to remove a governor on the Federal Board of Governors for cause under 12 U.S.C. 242,” the White House told Fortune. “The president determined there was cause to remove a governor who was credibly accused of lying in financial documents from a highly sensitive position overseeing financial institutions.

“The removal of a governor for cause improves the Federal Reserve Board’s accountability and credibility for both the markets and American people.” 

Markets are behaving as though Cook will succeed, noted Deutsche Bank to clients this morning. Jim Reid, head of macro research, said: “Even if the overall case takes some time to reach a final verdict as the appeal moves through the courts, the injunction decision will have important implications for the Fed in the coming weeks and months.

“For now at least, it doesn’t appear that markets are pricing in much chance of Cook being forced out. In fact, if we look at Polymarket, it suggests there’s a 79% chance that Cook will still be voting at the next FOMC meeting in mid-September. And earlier this week, when Trump published his letter removing her, long-end Treasury yields were pretty unreactive in the circumstances.”

The markets are still focused on the path to rate cuts, added Wharton professor emeritus Jeremy Siegel. That signal came from Powell at the Jackson Hole symposium a week ago, Siegel wrote for WisdomTree, where he is senior economist, prior to Cook’s legal filing: “Politically, the situation around Fed governor Lisa Cook adds noise but little substance. Her potential ouster, or replacement, won’t materially alter policy, especially now that Powell has signaled his intent. Trump’s influence may loom large in public discourse, but operationally, the Fed has already turned the corner.”

The fight so far

“Independence” is the word that many on Wall Street will be focusing on. Whether or not analysts agree with the Federal Open Market Committee’s current monetary stance, they believe that an independent central bank is key to the strength of the American economy.

Jake Manoukian, J.P. Morgan’s U.S. head of investment strategy, told Fortune earlier this year: “The Fed is at the heart of this institutional argument [about what] the U.S. has that’s different than other places.”

But President Trump’s actions since winning the Oval Office haven’t convinced markets that his administration is committed to letting the Fed operate independently. Since winning the election, Trump has lobbied for rate cuts (a swing from having exerted pressure before the election to hold them), lambasting Powell and threatening to fire him.

Trump then walked back that threat after markets rebelled, and instead began critiquing Powell’s management of the Federal Reserve more widely—recently targeting its office renovations. As well as making clear he will not be renewing Powell’s term when it expires in 2026, Trump and his team have also been speaking openly about Powell’s replacement and how quickly they would like to announce it.

On top of that, the White House welcomed the news that one FOMC member, Adriana Kugler, was resigning, and delivered a dovish Trump nominee, Stephen Miran, to take her place.

Trump’s response

The Trump team has escalated its attacks on governor Cook. Last night Bill Pulte, Trump’s federal housing director, published a letter on Elon Musk’s social media site, X, sent to Bondi, alleging that he has found a third property owned by Cook, which she claimed would be her primary residence when applying for a mortgage.

This is the second criminal referral Pulte has made, relating to Cook’s “alleged misrepresentations about her properties to the United States Government during her time as Governor of the Federal Reserve.”

“3 strikes and you’re out,” Pulte wrote alongside screenshots of the letter.

3 strikes and you’re out.

Today, U.S. Federal Housing sent a 2nd Criminal Referral in the matter of Lisa D. Cook, related to a mortgage on a 3rd property and alleged misrepresentations about her properties to the United States Government during her time as Governor of the… pic.twitter.com/TAH68Mia23

— Pulte (@pulte) August 29, 2025