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Fed Governor Lisa Cook is refusing to resign even as President Donald Trump said in a letter that she had been “removed” from office, effective immediately.” The extraordinary move has triggered a constitutional fight over presidential power and the independence of the central bank that is supposed to be above the political fray.

The president posted the letter to Cook on Truth Social after first calling for her resignation on the platform just five days earlier. Trump cited the U.S. Constitution and the Federal Reserve Act of 1913, which states a president can remove members of the Fed’s Board “for cause.” “I have determined that there is sufficient reason to believe that you have made false statements on one or more mortgage agreements,” Trump wrote.

“I have determined that faithfully enacting the law requires your immediate removal from office,” Trump added in the letter.

The president’s claims against Cook are based on allegations made by Bill Pulte, a Trump appointee to an agency that oversees Fannie Mae and Freddie Mac. In that role, Pulte made the accusations in an August 15 criminal referral to the Justice Department, which Cook has denied.

In an interview with Fox Business’ “Mornings with Maria,” Pulte was unambiguous in the language he used to make 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 a 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.”

Cook, who was appointed to the Federal Reserve Board in 2022 by then-President Joe Biden, quickly pushed back on Trump’s claim he had the power to fire 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 to Fox News Digital.

Cook is represented by Abbe Lowell, a lawyer who previously represented Hunter Biden, New York Attorney General Letitia James, Jared Kushner, and Ivanka Trump. He was equally blunt in his response to Trump’s letter on Truth Social.

“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. An official declined to comment immediately.

Lowell later announced a lawsuit on behalf of Cook to formally challenge the former president’s move. “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,” Lowell said.

Leading Democrats all rushed to Cook’s defense, blasting the former president’s move as unconstitutional and politicized. House Minority Leader Hakeem Jeffries, D-N.Y., Sen. Elizabeth Warren, D-Mass., and Rep. Jamie Raskin, D-Md., all put out statements on the issue.

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

Warren called Trump’s move “an authoritarian power grab” and added, “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 added, “There is not a shred of credible evidence that she has done anything wrong. 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.”

Trump is locked in a battle with Powell and the Fed over interest rates, and the fight over Lisa Cook appears to be the former president’s latest attempt to put more pressure on the Fed to capitulate to his demands to lower interest rates. The president and many Republicans have argued that the Fed’s policy of higher interest rates is increasing the cost of servicing the national debt, which has crossed the threshold of $37 trillion.

However, the move raises serious questions about the power of the president over an independent Federal Reserve. The Federal Reserve Act states the president can remove governors “for cause”, but legal experts point out that it is not an open-ended power and still requires just cause that is not alleged to have occurred in this case.

It remains to be seen whether Cook will fight the case or Trump will relent and withdraw his demand for her removal. Lowell has said a lawsuit is on the way, and the Republicans in the House and Senate have long-standing divisions over the former president. So the fight may be a protracted one that could end up being litigated in the courts.