US President Donald Trump has removed Federal Reserve Governor Lisa Cook from her position in a move that could set off a major legal fight over the independence of America’s central bank.
Trump announced Cook’s dismissal on Monday evening through a letter posted on his Truth Social account, accusing her of mortgage fraud. “In light of your deceitful and potentially criminal conduct in a financial matter, [Americans] cannot and I do not have such confidence in your integrity,” he wrote.
“I have determined that there is sufficient cause to remove you from your position”, he added.
The allegations against Cook, the first Black woman to serve on the Fed’s board, were originally raised by Bill Pulte, head of the Federal Housing Finance Agency. Pulte claimed Cook had declared two homes, one in Ann Arbor, Michigan, and another in Atlanta, as her primary residence in 2021 to obtain favourable loan terms, according to news agency AP.
Pulte referred the matter to the Justice Department, which has opened an investigation at his request.
Cook has not been charged with any wrongdoing. In a statement last week, she said she had “no intention of being bullied to step down” and promised to provide facts to answer any legitimate questions.
As per the New York Times, Trump’s move is legally questionable because the Federal Reserve Act allows a governor to be removed only for “cause,” such as proven neglect or misconduct. Cook’s term was meant to run until 2038, meaning her ouster could reshape the balance of the seven-member board.
Legal experts believe she may continue in her role while the case works its way through the courts.
The firing comes as Trump intensifies his criticism of the Fed for keeping interest rates steady despite his push for aggressive cuts. With Cook’s removal and another vacancy following the resignation of Governor Adriana Kugler earlier this month, Trump now has the chance to fill two seats.
He has already nominated Stephen Miran, chair of the White House Council of Economic Advisers, for Kugler’s slot, pending Senate confirmation.
As per the New York Times, the dismissal likely highlights Trump’s effort to install political loyalists at the Fed. Analysts warn this could damage the bank’s independence at a time when its credibility is central to managing inflation and monetary stability.
Trump announced Cook’s dismissal on Monday evening through a letter posted on his Truth Social account, accusing her of mortgage fraud. “In light of your deceitful and potentially criminal conduct in a financial matter, [Americans] cannot and I do not have such confidence in your integrity,” he wrote.
“I have determined that there is sufficient cause to remove you from your position”, he added.
The allegations against Cook, the first Black woman to serve on the Fed’s board, were originally raised by Bill Pulte, head of the Federal Housing Finance Agency. Pulte claimed Cook had declared two homes, one in Ann Arbor, Michigan, and another in Atlanta, as her primary residence in 2021 to obtain favourable loan terms, according to news agency AP.
Pulte referred the matter to the Justice Department, which has opened an investigation at his request.
Cook has not been charged with any wrongdoing. In a statement last week, she said she had “no intention of being bullied to step down” and promised to provide facts to answer any legitimate questions.
As per the New York Times, Trump’s move is legally questionable because the Federal Reserve Act allows a governor to be removed only for “cause,” such as proven neglect or misconduct. Cook’s term was meant to run until 2038, meaning her ouster could reshape the balance of the seven-member board.
Legal experts believe she may continue in her role while the case works its way through the courts.
The firing comes as Trump intensifies his criticism of the Fed for keeping interest rates steady despite his push for aggressive cuts. With Cook’s removal and another vacancy following the resignation of Governor Adriana Kugler earlier this month, Trump now has the chance to fill two seats.
He has already nominated Stephen Miran, chair of the White House Council of Economic Advisers, for Kugler’s slot, pending Senate confirmation.
As per the New York Times, the dismissal likely highlights Trump’s effort to install political loyalists at the Fed. Analysts warn this could damage the bank’s independence at a time when its credibility is central to managing inflation and monetary stability.
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