U.S. President Donald Trump announced on Monday evening that Federal Reserve Governor Lisa Cook was being removed from her post with immediate effect. Trump alleged that Cook submitted false information on two separate mortgage applications.
The attempted removal is the latest clash between Trump and the Fed. It follows repeated calls from the president for the central bank to cut interest rates immediately. Analysts expect the move to trigger a high-profile legal battle that could allow Cook to remain in her position until the courts issue a ruling.
In response, Cook said Trump had attempted to dismiss her “for cause” without legal grounds, insisting he lacked the authority to remove her. She added that she intends to continue serving on the Fed board.
Trump defended his decision in a letter posted on social media, claiming there was “sufficient cause” for dismissal. He alleged Cook falsely listed two different properties as primary residences on mortgage agreements signed only weeks apart.
The accusations were first raised earlier in August by Federal Housing Finance Agency Director William Pulte, a Trump ally. Pulte stated that Cook declared a condo in Atlanta as her primary residence despite already claiming a Michigan home under the same condition. He later referred the matter to U.S. Attorney General Pam Bondi for investigation. Trump supported the allegation and said it was “inconceivable” that Cook was unaware of both commitments.
Cook, who became the first Black woman to serve on the Fed board, denied the charges. She stressed that she would not resign under pressure, calling the claims politically motivated.
Reports earlier this week indicated that Trump was actively seeking Cook’s removal to expand his influence over the Fed. Cook is one of three Biden-era appointees whose terms extend beyond Trump’s second administration. Replacing her with his own nominee could shift the balance of the Fed board, which sets the nation’s interest rates.
Currently, two of the seven members on the Fed board—Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman—were nominated by Trump and both voted for a rate cut in July, aligning with his agenda. Chair Jerome Powell, also a Trump nominee during his first term, has largely resisted pressure for immediate cuts, though he recently signaled possible easing in September due to labor market weakness.
Trump has also threatened to fire Powell in the past, accusing him of mishandling renovation funds at the Fed’s headquarters. However, no action has been taken so far.
Beyond the Fed, Trump’s administration has pursued mortgage fraud investigations into several of his political opponents, including New York Attorney General Letitia James and Senator Adam Schiff, raising further concerns about the politicization of such probes.
