Cook faces scrutiny over mortgage allegations
President Donald Trump said Friday he would fire Federal Reserve Governor Lisa Cook if she does not resign, intensifying his administration’s push to reshape the central bank. Speaking at The People’s House museum, Trump criticized Cook, an appointee of former President Joe Biden, over alleged mortgage fraud and said, “What she did was bad.”
“So I’ll fire her if she doesn’t resign,” Trump added, referencing a Justice Department investigation launched after a referral from Federal Housing Finance Agency Director Bill Pulte. Pulte accused Cook of fraudulently listing two properties as her primary residence, prompting a federal inquiry.
Impact on Fed leadership and policy direction
Removing Cook could allow Trump to significantly alter the composition of the Federal Reserve Board. With seven total governor positions, Trump has already appointed two members, Christopher Waller and Michelle Bowman, both of whom dissented on the Fed’s recent decision to keep interest rates steady. A third seat opened earlier this summer when Adriana Kugler stepped down.
If Cook is ousted, Trump would likely nominate a successor aligned with his monetary policy views, potentially creating a conservative majority on the board. Fed governors serve 14-year terms, meaning Trump’s influence could extend far beyond his presidency.
Political reactions and legal constraints
Federal Reserve Chair Jerome Powell cannot remove Cook, despite public pressure. Ed Martin, a Justice Department lawyer close to Trump, has also called for Cook’s removal, but under current law, the Fed chair lacks that authority.
Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, defended Cook and criticized Trump’s actions as politically motivated. “He’s trying to find a scapegoat for his failure to lower costs for Americans,” she wrote on X.
Cook has voted consistently with Powell, including siding with the majority in the Federal Open Market Committee’s latest decision to maintain interest rates.
Wider implications for Fed independence
The controversy adds another layer of tension between the White House and the central bank, raising concerns about the Fed’s independence. Trump has long criticized the Fed’s pace on rate cuts and now appears poised to use legal and political tools to exert further control over its board.
Pulte, a known critic of Powell and supporter of Trump’s monetary stance, has aggressively attacked Cook online, amplifying the allegations against her. His involvement has fueled speculation about coordinated efforts to pressure the Fed into a more accommodative monetary stance.
The Justice Department investigation into Cook’s alleged conduct is ongoing. If she is found in violation of federal law or ethics regulations, Trump may claim sufficient grounds to remove her “for cause,” though such action could trigger legal and institutional challenges.
