President Donald Trump dismissed Federal Reserve Governor Lisa Cook late Monday, a shock move that intensifies his push to exert influence over the traditionally independent central bank.
In a letter posted on his Truth Social platform, Trump said Cook was removed due to allegations of mortgage fraud. The claims surfaced last week when Bill Pulte, a Trump appointee to the Federal Housing Finance Agency, accused Cook of improperly declaring two primary residences — one in Ann Arbor, Michigan, and another in Atlanta — in 2021 to secure more favorable mortgage terms.
The decision comes shortly after Cook vowed not to step down despite Trump’s earlier demand for her resignation, with Senate Democrats backing her position.
“The Fed plays a critical role in regulating banks and setting interest rates. The American people deserve complete confidence in the integrity of its members,” Trump wrote in his letter to Cook. He added that her alleged conduct undermined that trust, justifying her immediate removal.
Trump argued that the Constitution grants him authority to dismiss Cook, though the move is expected to ignite a legal showdown. Cook may be able to remain in her role while challenging the dismissal in court.
The firing underscores Trump’s broader effort to tighten control over the Fed. He has repeatedly criticized Fed Chair Jerome Powell for not cutting interest rates aggressively and has openly floated the idea of replacing him. Powell’s current term ends in May 2026.
Removing Cook could allow Trump to install a loyalist aligned with his push for lower interest rates. Still, Fed policy is decided by a 12-member committee, meaning that even new appointments may not fully guarantee Trump’s desired outcome.
The shake-up comes just as Powell signaled potential rate cuts in the near future, despite lingering inflation concerns.
