Trump Fires Fed Governor Lisa Cook

President Donald Trump fired Federal Reserve governor Lisa Cook on Monday, a major step in his pressure campaign against the central bank, which has defied his calls for lower interest rates.

The firing came after Federal Housing Finance Agency Director Bill Pulte asked the Justice Department to consider prosecuting Cook for mortgage fraud.

Trump said that Cook was fired with immediate effect in a note posted to Truth Social. In the document, he accused her of “deceitful and potentially criminal conduct.”

Cook, 61, found herself in the crosshairs of the Trump administration last week when Pulte sent the referral to to Attorney General Pam Bondi. Trump called for Cook to resign soon after.

The Pulte accusations stem from allegations that Cook listed both a home in Michigan and a home in Georgia as her primary residence several months before she was nominated to the Fed board by former President Joe Biden.

Although the Supreme Court ruled earlier this year that the president generally has the power to remove independent agency members, the conservative majority stipulated in that case that Federal Reserve board members can only be fired for cause. Trump cited the mortgage fraud claims as cause to fire Cook, a justification that could invite a legal challenge to the firing, as well as backlash from members of Congress.

Sen. Elizabeth Warren (D-MA), the top Democrat on the Senate Banking Committee, which oversees the Fed, criticized the move and called on the courts to prevent Trump from firing Cook.

“The illegal attempt to fire Lisa Cook is the latest example of a desperate president searching for a scapegoat to cover for his own failure to lower costs for Americans,” she said. “It’s an authoritarian power grab that blatantly violates the Federal Reserve Act, and must be overturned in court.”

The independence of the Fed from the executive branch has long been viewed by investors as an asset. The value of the dollar immediately dropped following the news that Trump moved to fire Cook.

Successfully removing Cook would give Trump the ability to nominate a new person to the Fed board, presumably someone who would share his desire for the central bank to slash interest rates. Trump has repeatedly berated Fed Chairman Jerome Powell for refusing to cut rates this year. Cook has consistently voted to hold interest rates steady rather than cut.

Earlier this year, Trump threatened to fire Powell, although he backed off that threat in recent weeks.

Another Fed governor who voted to hold interest rates steady, Adriana Kugler, recently and unexpectedly resigned, handing Trump another opening on the board. Two members of the Federal Open Market Committee voted to lower interest rates at the last meeting: Christopher Waller and Michelle Bowman.

In the letter to Bondi, Pulte said it appears Cook “falsified bank documents and property records to acquire more favorable loan terms, potentially committing mortgage fraud under the criminal statute.”

“This has included falsifying residence statuses for an Ann Arbor, Michigan-based residence and an Atlanta, Georgia-based property in order to potentially secure lower interest rates and more favorable loan terms,” Pulte wrote.

Pulte has emerged, perhaps unexpectedly, as one of Trump’s most vociferous attack dogs and the administration’s leading critic of the Fed’s monetary policy and Powell.

In his role as FHFA Director, Pulte oversees the government-sponsored enterprises Fannie Mae and Freddie Mac.