President Trump fired Federal Reserve Governor Lisa Cook on Monday following accusations of mortgage fraud. Her firing virtually ensures that Trump will appoint a successor who supports his push for deeper interest rate cuts, which the President believes should be done immediately to boost the economy.
The decision marks a sharp escalation of Trump's effort to tighten his grip on an institution traditionally viewed as independent from routine political influence. Trump has been relentlessly pressuring Federal Reserve Chair Jerome Powell to cut the central bank's short-term interest rates. Firing Cook opens the door for Trump to appoint a loyal MAGA supporter who could bolster his influence over the central bank.
Fired for Fraud
"Pursuant to my authority under Article Il of the Constitution of the United States and the 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," Trump wrote in a letter addressed to Cook, which he posted on Truth Social.
Cook's firing follows allegations from Federal Housing Finance Agency Director Bill Pulte, who, in a criminal referral submitted to Attorney General Pam Bondi last week, accused the Fed board member of falsifying bank paperwork and property records to obtain more favorable loan conditions.
In a post on X, Pulte claimed that Cook listed an Atlanta condo as her primary residence in July 2021—only two weeks after taking a mortgage on her Michigan house, which she had also identified as her primary residence.
The FHFA chief had earlier referred Senator Adam Schiff (D-Calif.) and New York's Democratic Attorney General Letitia James to the Justice Department over similar mortgage fraud claims.
Trump said that Cook's removal was "for cause," pointing to Pulte's referral in his termination letter to Cook. "The Federal Reserve Act provides that you may be removed, at my discretion, for cause," the president wrote. "I have determined that there is sufficient cause to remove you from your position."
No Mercy from Trump
After citing the allegations against Cook brought in by Pulte, Trump argued: "It is inconceivable that you were not aware of your first commitment when making the second. It is impossible that you intended to honor both.
"The Federal Reserve has tremendous responsibility for setting interest rates and regulating reserve and member banks," the president wrote, adding, "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."
Trump argued that the records revealed by Pulte "at a minimum ... calls into question your competence and trustworthiness as a financial regulator."
Last Wednesday, the president had already demanded Cook step down, declaring she "must resign, now!"
"I have no intention of being bullied to step down from my position because of some questions raised in a tweet," Cook said in a statement responding to Trump's call for her to step down.
Cook's ouster creates a third vacancy on the Federal Reserve board for Trump to fill.
In the coming months, Trump is expected to put forward nominees for both a new Fed chair and another governor—positions that carry permanent voting power on the 12-member committee that determines interest rates.
