Trump Moves to Fire Fed Governor Lisa Cook Over Fraud Claims

WASHINGTON, D.C. — On Monday, August 25, 2025, President Donald Trump announced his decision to remove Federal Reserve Governor Lisa Cook from her position, marking an unprecedented escalation in his ongoing campaign to influence the central bank. The move, reported by CNBC, follows allegations from Federal Housing Finance Agency Director William Pulte, a Trump ally, who accused Cook of falsifying mortgage documents to secure favorable loan terms.

In a letter posted on Truth Social, Trump wrote, “There is sufficient reason to believe you may have made false statements on one or more mortgage agreements,” citing a criminal referral from Pulte. The referral alleges Cook declared two properties in Ann Arbor, Michigan, and Atlanta, Georgia as her primary residences in 2021, potentially to obtain lower interest rates. Cook, the first Black woman to serve on the Fed’s Board of Governors, responded firmly, stating, “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so.” She vowed to continue her duties, with her attorney, Abbe Lowell, promising to challenge the action legally.

The Federal Reserve Act of 1913 allows the president to remove governors only “for cause,” typically interpreted as malfeasance or misconduct, not policy disputes. Cook, appointed by President Joe Biden in 2022 for a term until 2038, has not been charged with any crime. Legal experts, including Columbia Law’s Lev Menand, argue the allegations are insufficient for removal, noting that pre-Fed actions may not qualify as cause. “This would be a complicated proceeding,” Menand told reporters, suggesting a lengthy court battle.

Key points of the controversy include:

  • Pulte’s referral claims Cook misrepresented residency on two 2021 mortgages.
  • No criminal charges have been filed; the DOJ is reviewing the allegations.
  • Cook’s removal could allow Trump to appoint a loyalist, reshaping Fed policy.

The move has drawn sharp criticism. Senator Elizabeth Warren called it “an authoritarian power grab that blatantly violates the Federal Reserve Act.” Markets reacted, with the U.S. Dollar Index dipping slightly. As Trump pressures the Fed to cut rates, Cook’s case underscores fears of eroding central bank independence, potentially destabilizing economic confidence.

Source: CNBC

Author

  • Tyler Grayson

    Tyler Grayson brings global events to your screen with clarity, depth, and context. With a background in political science and international relations, Tyler covers diplomacy, global conflicts, climate issues, and major policy shifts with a balanced, facts-first approach. His reporting connects the dots between headlines and their real-world impact.

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