WASHINGTON — President Donald Trump fired Federal Reserve Governor Lisa Cook late Monday, a sharp escalation in his battle to exert greater control over what has long been considered an institution independent from day-to-day politics.
Trump said in a letter posted on his Truth Social platform that he is firing Cook because of allegations that she committed mortgage fraud. Bill Pulte, a Trump appointee to the agency that regulates mortgage giants Fannie Mae and Freddie Mac, made the accusations last week.
Pulte alleged that Cook had claimed two primary residences — in Ann Arbor, Michigan and Atlanta — in 2021 to get better mortgage terms. Mortgage rates are often higher on second homes or those purchased to rent.
The announcement came days after Cook said she wouldn’t leave her post despite Trump previously calling for her to resign. The Fed’s board has seven members, meaning Trump’s move could have deep economic and political ramifications.
Trump said in announcing the move that he had the constitutional authority to remove Cook, but doing so will raise questions about control of the Fed as an independent entity.
The firing is likely to touch off a legal battle and Cook could be allowed to remain in her seat while the case plays out. Cook would have to fight the legal battle herself, as the injured party, rather than the Fed.
It is the latest effort by the administration to take control over one of the few remaining independent agencies in Washington. Trump has repeatedly attacked the Fed’s chair, Jerome Powell, for not cutting its short-term interest rate, and even threatened to fire him.
Forcing Cook off the Fed’s governing board would provide Trump an opportunity to appoint a loyalist. Trump has said he would only appoint officials who would support cutting rates.