President Donald Trump followed through on his threat to fire Federal Reserve Governor Lisa Cook on Monday, removing her from her position "effective immediately." 

The rationale was spelled out in a letter sent to Cook, noting that she had been removed for "cause" in light of a recent criminal referral. Trump telegraphed the move days earlier, posting that "Cook must resign, now" after it was revealed that she allegedly lied on mortgage documents. 

RELATED: Real Estate Fraud Gets a Federal Reserve Governor a Federal Investigation

The criminal referral in question accused Cook of claiming her primary residence in Michigan on mortgage documents, only to turn around and do the same thing with a different property in Georgia just a month later. As the letter notes, it seems improbable that such a thing could be done unknowingly. 

Some "experts" have tried to claim that Cook's situation does not fall under the guise of "cause" when it comes to the authority of the president to remove Federal Reserve governors. But while the protections against removal afforded by the Banking Act of 1935 appear to extend to policy decisions, as in a governor can't be fired for not lowering interest rates, the idea that personal misconduct doesn't qualify belabors belief. Such a position would presume that a president can't fire someone who allegedly committed fraud. That stretches whatever protections exist far past the point of absurdity. 

Still, it likely won't be difficult for Cook to find a lower-court judge to agree with her if she chooses to contest this. It's a legal battle she very well could lose in the end, though, which begs the question of whether it's smart to poke the bear. Her firing doesn't change the fact that she's under criminal investigation. Antagonizing the administration by suing over her removal won't do her any favors. 

Looking at the big picture, Federal Reserve Chair Jerome Powell is set to be replaced soon by Trump, with his term ending in May. With Cook's departure, two of the governors seats are vacant, and the president gets to fill those as well. Given that he already has some allies on the Federal Reserve board, the balance of power in monetary policy is set to take a dramatic shift. 

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