US President Donald Trump has dismissed Federal Reserve Governor Lisa Cook, escalating his attempts to gain greater influence over the traditionally independent central bank.
Trump announced on Truth Social that Cook was being fired following allegations of mortgage fraud. The accusations were raised last week by Bill Pulte, a Trump appointee to the agency regulating mortgage giants Fannie Mae and Freddie Mac.
Pulte alleged Cook had claimed two primary residences — one in Ann Arbor, Michigan, and another in Atlanta — in 2021 to secure more favourable mortgage terms. Mortgage rates are generally higher for second homes or rental properties.
Refusal to resign before dismissal
The announcement came just days after Cook declared she would not step down, despite Trump earlier demanding her resignation. With the Federal Reserve board comprising seven members, the move could carry significant political and economic consequences.
Constitutional claim and legal fight ahead
Trump asserted he had the constitutional authority to remove Cook. However, the action is expected to raise serious questions about the independence of the Fed. Legal challenges are likely, with Cook potentially retaining her position during proceedings. Any challenge would have to be fought personally by Cook rather than the Fed.
Trump’s wider campaign against the Fed
The dismissal marks the latest push by Trump to exert control over independent agencies in Washington. He has repeatedly criticised Fed Chair Jerome Powell for not cutting short-term interest rates and even threatened to remove him.
Removing Cook would give Trump the chance to appoint a loyalist, with the President stating he would only select officials supportive of lowering rates.
