Trump Fires Federal Reserve Governor Lisa Cook

Moneylife Digital Team 26 August 2025

Economy & Nation

US president Donald Trump fired Federal Reserve (Fed) governor Lisa Cook late Monday, escalating his ongoing effort to assert greater political control over the central bank, which has traditionally operated at arm’s length from partisan battles. Dr Cook, however, immediately pushed back, saying president Trump had 'no authority' to remove her and vowing not to resign.

In a letter posted on his Truth Social platform, president Trump said Dr Cook was being removed for cause under the Federal Reserve Act after allegations that she committed mortgage fraud. The charges were raised last week by Bill Pulte, a Trump appointee to the Federal Housing Finance Agency which oversees Fannie Mae and Freddie Mac.

Mr Pulte alleged that in 2021, Dr Cook claimed two different homes as her primary residence, one in Ann Arbor, Michigan, and another in Atlanta, Georgia, allowing her to secure lower mortgage rates on both properties. Mortgage rates are, typically, higher for second homes or investment properties.

President Trump’s letter cited a criminal referral dated 15 August 2025, from Mr Pulte to US attorney general Pamela Bondi, claiming Dr Cook made false statements on mortgage documents.

“It is inconceivable that you were not aware of your first commitment when making the second,” president Trump wrote, calling the alleged conduct 'deceitful and potentially criminal'.

“The American people must be able to have full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve,” president Trump says. “In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity.”

Dr Cook, a former economics professor at Michigan State University and the first Black woman to serve on the Fed’s board of governors, was appointed by president Joe Biden in 2022. Her dismissal marks the most direct intervention by a president into the leadership of the US central bank in decades, and it is certain to spark legal and political battles over the independence of the Federal Reserve.

Fed governor Cook pushed back with a sharp rebuttal, saying president Trump had no authority to remove 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 and will continue my work to support the US economy, as I have since 2022,” she says in a statement emailed to reporters through the law office of lawyer Abbe Lowell.

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