Key Takeaways
- President Trump used a rare statutory clause to fire Federal Reserve Governor Lisa Cook over alleged misconduct.
- Cook is the first sitting Fed governor in modern history to be removed by a president, raising questions about presidential power over the central bank.
President Donald Trump has dismissed Federal Reserve Governor Lisa Cook from her position under a rarely invoked statute that permits the removal of central bank officials “for cause.”
In a two-page letter dated August 25, Trump said he had determined that Cook’s involvement in alleged mortgage fraud warranted immediate removal.
Cook, a Biden appointee and the first Black woman to serve on the Fed board, has been accused of listing two properties as her primary residence to qualify for better mortgage rates, a move that triggered a criminal referral from the Federal Housing Finance Agency (FHFA). The controversy fueled pressure from President Trump and others for her to step down.
Cook has pushed back on the claims and says she’ll cooperate with any review of her finances, while Fed officials have publicly emphasized their support for her and stressed the need for more factual information before drawing conclusions.
“You signed one document attesting that a property in Michigan would be your primary residence for the next year. Two weeks later, you signed another document for a property in Georgia stating that it would be your primary residence for the next year,” Trump’s letter states. “It is inconceivable that you were not aware of your first commitment when making the second. It is impossible that you intended to honor both.”
“The Federal Reserve has tremendous responsibility for setting interest rates and regulating reserve and member banks. 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,” Trump wrote.
Cook, who had voiced support for a possible interest rate cut at the Fed’s September meeting, is the first sitting governor in modern history to be fired by a president. Legal experts anticipate challenges to the decision.
“Trump’s reckless firing of Fed Gov Lisa Cook is clearly unlawful,” said Representative Jerry Nadler in a statement. “The Federal Reserve Act permits removal only for cause, serious misconduct, not partisan smears dressed up as ‘referrals’ from a hack like Ed Martin. The Supreme Court reaffirmed this protection just months ago.”
“Trump undermining the Fed for political reasons endangers financial stability and every American’s livelihood, and must be challenged in court immediately,” he added.
The firing adds to a series of board changes at the Fed in recent weeks. Earlier this month, Governor Adriana Kugler resigned to return to Georgetown University, ending a tenure that began in September 2023. Her exit followed mounting White House pressure on the Fed to accelerate rate cuts.
In her place, Trump tapped Stephen Miran, chair of the Council of Economic Advisers and a vocal supporter of Bitcoin, as a temporary addition to the Board. Pending Senate confirmation, Miran is expected to serve through January 2026 and could take part in the Fed’s September meeting.
