WASHINGTON — President Donald Trump dismissed Federal Reserve Governor Lisa Cook late Monday, marking a heightened effort to assert more influence over an institution traditionally seen as independent from political interference.
Trump announced on his Truth Social platform that he terminated Cook over allegations of mortgage fraud. These claims were recently made by Bill Pulte, a Trump appointee to the agency that oversees Fannie Mae and Freddie Mac.
Pulte accused Cook of declaring two primary residences—in Ann Arbor, Michigan, and Atlanta—in 2021 to secure more favorable mortgage rates, as higher rates are usually applied to secondary residences or rental properties.
This occurred a few days after Cook declared she would remain in her role despite Trump’s earlier demands for her resignation. With the Fed’s board consisting of seven members, Trump’s action may have significant economic and political impacts.
In asserting his decision, Trump stated he had the constitutional authority to remove Cook, though this raises issues about the independence of the Fed.
The dismissal is expected to lead to a legal dispute, with Cook potentially retaining her position during the proceedings. She would need to pursue the legal case independently as an injured party, not as a representative of the Fed.
It is the latest effort by the administration to take control over one of the few remaining independent agencies in Washington. Trump has repeatedly attacked the Fed’s chair, Jerome Powell, for not cutting its short-term interest rate, and even threatened to fire him.
Forcing Cook off the Fed’s governing board would provide Trump an opportunity to appoint a loyalist. Trump has said he would only appoint officials who would support cutting rates.
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