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Editor’s note: This story has been updated with Cook’s statement that she plans to stay in her position.
President Donald Trump published a letter firing Fed Governor Lisa Cook Monday evening after calling for her resignation last week over allegations of mortgage fraud. The move would further consolidate Trump’s power at the Federal Reserve, which has traditionally been an independent organization shielded from overtly political actions. However, Cook has said the president doesn’t have the authority to fire her and she plans to stay in her position.
In a statement to CNN on Monday night, Cook said: “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so. I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
Cook, a Biden appointee to the seven-member board and its first Black woman, was targeted by FHFA Director Bill Pulte starting in mid August, when he accused her of mortgage fraud and called on Attorney General Pam Bondi to investigate Cook’s purchase of two houses in 2021. By claiming both houses were bought as a primary-residence, Pulte said Cook “falsified bank documents and property records to acquire more favorable loan terms, potentially committing mortgage fraud under the criminal statute.”
However, no formal charges have been filed by the DOJ against Cook. In the letter firing Cook, Trump cites the criminal referral from Pulte to Bondi as giving him sufficient cause to fire her, although the FHFA Director doe not play a law enforcement role. Trump states that, as set forth in that referral, “there is sufficient reason to believe you may have made false statements on one or more mortgage agreements.”
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.”
Trump has been battling Federal Reserve Chair Jerome Powell over interest rates since his re-election and started openly saying he could fire Powell in April. However, the market’s negative reaction each time the president has suggested he would fire Powell (first in April, then in July) has caused him to look for alternatives. He now seems intent on replacing members of the board of governors with his supporters.
On Aug. 1, Fed Governor Adriana Kugler, another Biden nominee, announced her resignation, ending her term almost 18 months early. Trump plans to nominate Stephen Miran to take her place on the board. Miran currently chairs the White House Council of Economic Advisers.
“The writing was on the wall two months ago,” HousingWire Lead Analyst Logan Mohtashami said Monday. “Trump wants lower rates, and he will put as many of his own people in the Fed chamber to get the votes to go against Powell. The numbers are growing in his favor against Powell now.”
Cook refused to resign under Trump’s pressure last week, saying in a statement: “I have no intention of being bullied to step down from my position because of some questions raised in a tweet. I do intend to take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions and provide the facts.”
