US President Donald Trump has ordered the removal of Federal Reserve Governor Lisa Cook, citing unproven allegations of mortgage fraud a dramatic and unprecedented move that has triggered immediate concerns over the independence of the central bank.
The claims originated last week from Federal Housing Finance Agency director Bill Pulte, a Trump appointee, who accused Professor Cook of claiming two primary residences in 2021 one in Michigan and another in Atlanta — in an effort to secure better mortgage terms.
Trump’s Letter of Dismissal
In a letter shared on Truth Social Monday night, Trump said Cook was being sacked “effective immediately” under his powers from the US Constitution and the 1913 Federal Reserve Act.
Citing the allegations, Trump wrote:
“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.”
He added that her alleged actions amounted to “gross negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator.”
Cook Rejects Dismissal
Professor Cook denied the allegations and rejected Trump’s authority to remove her.
“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.
Her attorney, Abbe Lowell, also pushed back, calling Trump’s move unlawful: “His reflex to bully is flawed and his demands lack any proper process, basis, or legal authority. We will take whatever actions are needed to prevent his attempted illegal action.”
Background
Cook, appointed by President Joe Biden in 2022, became the first Black woman to serve on the Federal Reserve’s Board of Governors. Her confirmation narrowly passed the Senate on a 50–50 vote, with then Vice President Kamala Harris breaking the tie after strong opposition from Republicans.
Trump’s unprecedented attempt to oust a sitting Fed governor who serves a 14-year term is likely to spark a constitutional and legal showdown, with potentially significant implications for the Federal Reserve’s independence.
