President Donald Trump has dismissed Federal Reserve Governor Lisa Cook over allegations that she committed mortgage fraud.
In a letter dated August 25 to his Truth Social account to Cook, President Trump posted: “Pursuant to my authority under Article II of the Constitution of the United States and Federal Reserve Act of 1913, as amended, you are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately. The Federal Reserve Act provides that you may be removed, at my discretion, for cause, See 12 U.S.C. 242. I have determined that there is sufficient cause to remove you from your position.”
Federal Housing Finance Agency (FHFA) Director Bill Pulte had accused Cook of mortgage fraud after designating a Michigan home and an Atlanta condominium as her primary residences on loan applications, potentially securing more favorable terms.
Pulte posted a series of images and documents on X regarding Cook’s Michigan residence and another described as an “Atlanta condo.”
Upon news of Cook’s dismissal, Pulte posted on X: “Thank you President Trump for your commitment to stopping mortgage fraud and following the law. If you commit mortgage fraud in America, we will come after you, no matter who you are.”
Trump continued in his letter: “The Federal Reserve has tremendous responsibility for setting interest rates and regulating reserve and member banks. The American people must be able to have full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve. In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity.”
Cook shot back at Trump, claiming the president has “no authority” to remove her from her position: “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” she said in a statement. “I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
Section 10 of the Federal Reserve Act of 1913 states that a president can only dismiss a Federal Reserve Governor “for cause.”
A former Michigan State University (MSU) Economist and Professor, Cook was confirmed by the Senate Banking Committee to the Board of Governors of the Federal Reserve System in May 2022 under the Biden Administration, and is the first Black woman to serve on the Fed’s Board of Governors in its 108-year history. Prior to her appointment, from 2018-2021, Cook was Director of the American Economic Association Summer Training Program. She was also a Research Associate at the National Bureau of Economic Research. Cook was on the faculty of Harvard University’s Kennedy School of Government. During her time at Harvard, she also served as Deputy Director for Africa Research at the Center for International Development. Before then, she was a National Fellow at Stanford University.
From 2011-2012, Cook served as a Senior Economist on the Council of Economic Advisers under President Barack Obama. From 2000-2001, she served as a Senior Advisor on Finance and Development in the U.S. Department of Treasury’s Office of International Affairs.
President Trump recently announced the nomination of Stephen Miran to fill a vacancy at the Federal Reserve’s Board of Governors. Adriana Kugler, who was appointed to the Federal Reserve Board by President Biden in 2023, announced recently that she was stepping down from her position as Governor on the Fed Board, and will return to Georgetown University as a Professor this fall.
If confirmed, Miran will serve out Kugler’s term, which expires January 31, 2026. In the coming months, Trump is set to nominate a new Fed Chair and another Governor, both with permanent votes on the 12-member rate-setting committee, bringing the president closer to shaping the balance of the Fed’s board in his favor.
The Federal Open Market Committee (FOMC), which makes the actual monetary policy decisions, is comprised of seven governors and five of the 12 regional Federal Reserve Bank Presidents. While the chair has one vote like the other governors, the structure is designed to prevent one individual, including the president, from dictating decisions and policies. Trump appointed Jerome Powell as head of the Federal Reserve during his first term in 2018, with his term ending in May 2026.
The Federal Reserve System performs five general functions to promote the effective operation of the U.S. economy:
- To promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy;
- Promotes the stability of the financial system and seeks to minimize and contain systemic risks through active monitoring and engagement in the U.S. and abroad;
- Promotes the safety and soundness of individual financial institutions and monitors their impact on the financial system as a whole;
- Fosters payment and settlement system safety and efficiency through services to the banking industry and the U.S. government that facilitate U.S.-dollar transactions and payments; and
- Promotes consumer protection and community development through consumer-focused supervision and examination, research and analysis of emerging consumer issues and trends, community economic development activities, and the administration of consumer laws and regulations.
President Trump has been at odds with Fed Chair Powell for refusing to slash the fed funds rate, going as far as pushing for an investigation into a proposed $2.5 billion renovation to the Federal Reserve headquarters. According to the New York Post, the projected renovations by the Fed have risen by 30% from an original estimate of $1.9 billion.
