President Donald Trump on Monday fired Federal Reserve governor Lisa Cook over claims of mortgage borrowing impropriety.
Trump put out a post on Truth Social, announcing he was firing the first African-American woman to serve as a Federal Reserve governor.
Trump wrote in the letter “I have determined that there is sufficient cause to remove you from your position.” He added there was sufficient evidence that Cook had made false statements on mortgage applications. "At minimum, the conduct at issue exhibits the sort of gross negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator."
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The president had earlier called on her to resign after U.S. Federal Housing Finance Agency Director William Pulte accused her of claiming two of her mortgages as primary residences. The Department of Justice also said that it was looking into the matter.
What is the mortgage fraud allegation against Cook
{{/usCountry}}The president had earlier called on her to resign after U.S. Federal Housing Finance Agency Director William Pulte accused her of claiming two of her mortgages as primary residences. The Department of Justice also said that it was looking into the matter.
What is the mortgage fraud allegation against Cook
{{/usCountry}}Cook, who was nominated to the Fed's Board of Governors in 2022, when Joe Biden was president, took out the mortgages in question in 2021 when she was an academic. An official financial disclosure form for 2024 shows Cook has three mortgages, with two listed as personal residences.
As per Pulte, Cook committed mortgage fraud by listing two of her mortgages as her primary residence. However, no evidence has been given to back this claim. Loans for primary residences might come with lower borrowing rates.
Pulte also said Cook's alleged fraud is "self-evident" and easily seen in publicly available documents adding that the issues were uncovered as part of regular investigations.
Trump's new move and what it means for the US Fed
Notably, Trump's new move comes despite a May 2025 directive from the Supreme Court that the President could not just remove Fed board members. “The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” the court had said at the time.
With Cook's firing, Trump is not just going against the top court's advisory, but also upping the ante with Fed leadership. Trump has long been pushing for aggressive rate cuts, while Fed officials have kept them steady, fearing inflation. The president has regularly threatened to fire Fed Chair Jerome Powell as well, but lacks the legal authority to fire the Fed chair.
However, Cook's exit – with her tenure slated to have run till 2038 – gives Trump a chance to reshape the Fed. Trump elevated Fed Governor Michelle Bowman to be the central bank's top bank regulator, and is believed to be considering Fed Governor Christopher Waller as Powell's successor.
(With Reuters inputs)