Federal Reserve (Fed) Governor Lisa Cook has launched a legal battle against the White House, suing the administration of Donald Trump over her firing, according to court documents published on Thursday.

According to the filing, Cook's legal case will challenge "President Trump's unprecedented and illegal attempt" to remove her from her position.

Cook's firing was the first ever in the 112-year history of the US central bank institution.

The lawsuit states that Trump violated federal law, which only allows him to remove a Fed governor only "for cause." The allegations against her, her lawsuit claims, do not amount to "cause."

Cook's sudden dismissal has raised concerns about the Fed's independence from the White House and it comes as Trump has railed against the institution, routinely criticizing and threatening Fed chair Jerome Powell over his policy on interest rates.

Markets have reacted negatively to Trump's quarrel with the Fed, and the US dollar stumbled against other major currencies after Trump first said he would remove Cook.

Why did Trump fire Lisa Cook?

Earlier this week, Trump announced announced that he was removing Cook from her position, effective immediately, due to allegations that she obtained mortgage funds improperly.

"I have determined that there is sufficient cause to remove you from your position," he said in a letter posted on social media. Trump went on to describe that Cook had signed two different addresses as primary residences in two different contracts, weeks apart.

He called it a "deceitful and potentially criminal conduct in a financial matter," saying it eroded the American people's trust in her to oversee the Federal Reserve.

Cook has held the post since 2022. She was appointed by former President Joe Biden and is the first Black woman to serve as a Fed governor.

What's in the lawsuit?

Cook has said the conduct allegation is unsubstantiated allegation, noted that it took place before she was confirmed to her position at the Fed.

She has denied committing mortgage fraud, but said that even if the allegation were true it would still not justify her removal.

"The President would not have 'cause' to remove a Federal Reserve Governor even if he possessed smoking gun evidence that she jaywalked in college," Cook's lawyers wrote in the lawsuit.

In the lawsuit, Trump is also accused of violating her right to due process under the US Constitution, as he fired her without notice or without a hearing.

Edited by: Wesley Dockery