Trump Moves to Fire Fed Governor Lisa Cook Over Mortgage Fraud Allegations
In a stunning escalation of his battle with the Federal Reserve, Donald Trump has announced that he is firing Federal Reserve Governor Lisa Cook, accusing her of mortgage fraud—a move critics say threatens the central bank’s independence.
Trump sent Cook a letter on Monday declaring her removal “effective immediately,” citing allegations from one of his allies that she had misrepresented a second home as her primary residence to secure a mortgage.
Cook Pushes Back: “No Legal Authority”
Hours later, Lisa Cook hit back through a statement released by her attorney, Abbe Lowell, insisting that Trump’s move had no legal grounds.
“No cause exists under the law, and he has no authority to remove me,” Cook stated. “I will continue to carry out my duties to help the American economy.”
Lowell reinforced the stance, slamming Trump’s order as baseless and unlawful, and vowed:
“We will take whatever actions are needed to block this illegal action.”
Despite her defiance, Trump posted the full letter on social media, insisting he had found “sufficient cause” to terminate her position.
A Power Play Over Fed Policy
Cook’s removal would give Trump the chance to install his own pick, tightening his grip over the Federal Reserve—an institution that has resisted his demands for steep interest rate cuts.
This isn’t the first time the administration has pursued its opponents under the banner of mortgage fraud. Trump allies have previously targeted New York Attorney General Letitia James and California Senator Adam Schiff with similar claims—both of which they denied.
Though Cook isn’t a politician, she has repeatedly sided against Trump’s calls for rate cuts. Appointed by Joe Biden in 2022, Cook made history as the first Black woman on the Fed’s Board of Governors, a role meant to last until 2038.
Who Is Lisa Cook?
A respected economist, Cook has taught at Harvard University and Stanford University, and served on Barack Obama’s Council of Economic Advisers. Her appointment was widely celebrated as a milestone in representation at the Fed.
But her career is now under siege, largely due to accusations pushed by Bill Pulte, head of the Federal Housing Finance Agency and a Trump appointee. Pulte alleged Cook claimed two different properties as her primary residence when applying for mortgages in 2021.
On social media, he questioned:
“How can this woman be in charge of interest rates if she’s allegedly lying to lower her own?”
Pulte has since referred the case to the Department of Justice. Trump quickly seized on the claim, demanding Cook’s resignation on Truth Social with the words: “She must resign, now!!!”
Legal Experts: Trump Can’t Fire Her
The move comes despite a Supreme Court opinion in May suggesting that presidents cannot remove Federal Reserve governors without cause, since the Fed is an independent agency.
Chuck Schumer, Senate Democratic leader, blasted Trump’s attempt:
“Donald Trump is playing a dangerous game of Jenga with a key pillar of our economy. This brazen power grab must be stopped before permanent damage is done.”
Schumer warned that if Trump’s maneuver causes an economic meltdown, “Trump will own every ounce of the wreckage.”
Economists Warn of Fallout
Jerome Powell, Fed chair, has already hinted at interest rate cuts coming soon, but warned that Trump’s policies—such as sweeping tariffs and tough immigration rules—risk destabilizing the economy.
Prominent Democrats also denounced the move:
Elizabeth Warren called it “an authoritarian power grab” that violates the Federal Reserve Act.
Rohit Chopra, former CFPB director, accused Trump of trying to turn regulators into “obedient lapdogs.”
Skanda Amarnath, executive director of Employ America, warned that undermining the Fed would further weaken the US dollar and drive higher prices for Americans.
Description:
"Donald Trump has fired Fed Governor Lisa Cook over mortgage fraud allegations, igniting a fierce legal and political battle over central bank independence."