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FILE – Board of Governors of the Federal Reserve member Lisa Cook speaks during a discussion with leaders from various sectors including nonprofits, small businesses, manufacturing, and more at the Federal Reserve building on September 23, 2022, in Washington. (AP Photo/Manuel Balce Ceneta, File)
WASHINGTON – President Donald Trump dismissed Federal Reserve Governor Lisa Cook late Monday, heightening his efforts to assert more influence over a body traditionally seen as operating independently from everyday political affairs.
Trump indicated in a letter shared on his Truth Social platform that Cook was removed due to allegations of mortgage fraud. The claims were made by Bill Pulte, a Trump appointee to the agency overseeing mortgage firms Fannie Mae and Freddie Mac, last week.
Pulte accused Cook of falsely declaring two primary residences in Ann Arbor, Michigan, and Atlanta in 2021 to obtain more favorable mortgage rates, which are typically higher for secondary homes or investment properties.
The declaration followed Cook’s statement that she would not step down from her role after Trump’s prior demand for her resignation. With the Fed’s board comprising seven members, this decision by Trump has potential significant economic and political effects.
Trump said in announcing the move that he had the constitutional authority to remove Cook, but doing so will raise questions about control of the Fed as an independent entity.
The firing is likely to touch off a legal battle and Cook could be allowed to remain in her seat while the case plays out. Cook would have to fight the legal battle herself, as the injured party, rather than 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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