President Donald Trump on Monday announced the firing of Federal Reserve Governor Lisa Cook, after she refused to resign despite pressure over the past week. The move is said to have stemmed from allegations of mortgage fraud involving two properties Cook purchased earlier this decade. In an official letter also shared on social media, Trump accused Cook of making contradictory statements about her primary residence and described her actions as “negligent, deceptive and potentially criminal.”
Trump wrote that Cook’s financial misconduct damaged her integrity and credibility as a financial regulator, and therefore provided “sufficient cause” for her dismissal. The move marks an unprecedented move against a Fed board member, pushing the central bank into uncharted legal territory. Analysts expect the issue to end up in the Supreme Court.
Cook, however, rejected Trump’s decision, insisting that the president does not have the legal authority to fire Fed board members. In a statement with his lawyer Abbe Lowell, Cook vowed not to resign and would take legal action to challenge what he called “incorrect” moves. “I will continue to do my job to help the American economy as I have done since 2022,” he said.
The crisis comes as political tensions between Trump and the Federal Reserve have escalated. Cook’s firing comes just days after Fed Chairman Jerome Powell gave a speech in Jackson Hole that paved the way for a September interest rate cut. A letter from Federal Housing Finance Agency chief Bill Pulte to Attorney General Pam Bondi alleged that Cook had “falsified bank and real estate records to obtain better loan terms.” The developments have once again tested the Fed’s independence under the Trump administration.
