Embattled Fed Governor Lisa Cook makes first public remarks since Trump said he fired her

Interest rates are in a good place to deal with persistently elevated inflation, Federal Reserve Governor Lisa Cook said Monday in her first public remarks since President Donald Trump said he had fired her.

Cook, appointed by former President Joe Biden and the first Black woman to serve as a Fed governor, is the first central bank official to ever be subject to a firing attempt. In a letter announcing her removal, Trump cited allegations of mortgage fraud, which still haven’t been taken to court. Cook sued Trump shortly afterwards, in what has become a landmark case on presidential power and Fed independence that will be decided next year by the Supreme Court.

The court ruled that Cook can remain in her role for now, and has scheduled oral arguments in January. Cook said Monday she is “beyond grateful” for the support she’s received in her legal battle with the Trump administration, but didn’t comment further on the topic.

Cook has voted to lower interest rates in the past two Fed meetings, but hadn’t commented publicly on the economy since before Trump said in August that he fired her. Fed officials routinely participate in public events to lay out their views on the economy in the spirit of transparency and helping investors understand the direction of monetary policy.

In prepared remarks for an event in Washington, DC, Cook offered a balanced perspective on the US economy, detailing the twin threat to the central bank’s dual mandate of stable prices and full employment.

She pointed to signs of strain in the labor market, such as rising Black unemployment, but suggested there’s more urgency to finish the job on inflation than to lower rates further to prevent mass layoffs.

“Let me be clear. I am committed to reaching our 2% inflation target,” she said. “I see the current policy rate as remaining modestly restrictive, which is appropriate given that inflation remains somewhat above our 2% target.”

Cook’s latest comments come at a time when Fed policymakers are divided on how Trump’s economic policies might impact prices, employment and economic growth.

There were “strongly differing views” among officials at last week’s rate-setting meeting, when the Fed lowered rates for the second time in a row, Chair Jerome Powell said in a post-meeting news conference. Two Fed officials cast dissenting votes, but for opposing reasons: Fed Governor Stephen Miran voted in favor a larger, half-point cut; while Kansas City Fed President Jeffrey Schmid preferred to hold borrowing costs steady.

That was the first time since 2019 there were dissents calling for both easier and tighter policy.

On one side, Fed officials argue that any inflation spurred by Trump’s aggressive tariff strategy will likely prove to be a one-off price increase and that the US labor market is at serious risk of falling off a cliff if the Fed doesn’t continue to lower rates. Most of the officials in this camp are Trump appointees.

Powell has characterized the notion of limited tariff inflation as “reasonable.” Cook herself said “the effect of tariffs on prices, in theory, should represent a one-time increase.”

The other side of the Fed debate argues that the risk of higher inflation is greater, especially when considering that inflation has remained above the Fed’s 2% target for more than four years. In a Friday statement explaining his dissent, Schmid said he has heard “widespread concern over continued cost increases and inflation” from people in his district.

“Rising healthcare costs and insurance premiums are top of mind,” he said.

The suspension of government data because of the government shutdown, which is nearing the longest on record, has made the Fed’s job of judging the economy even more difficult.

Cook didn’t provide a full-throated call for rate cuts in her latest remarks, but said she is attentive to the risks around the labor market. She also didn’t sound overly concerned with inflation, stating that her “assessment is that inflation is on track to continue on its trend toward our target of 2% once the tariff effects are behind us.”

“We are at a moment when risks to both sides of the dual mandate are elevated,” Cook said. “Every meeting, including December’s, is a live meeting.”

At the end of Monday’s event, Cook said she believes public service “is worth the scrutiny.”

“I’ve been motivated to do public service, given my family’s history, for example, in the civil rights movement and my participation in it myself,” she said. “And then I had to learn to have a thick skin if I thought the principle was worth pursuing.”

“This too shall pass,” Cook added.

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