Trump Fires Lisa Cook from Fed Board, Citing "Deceitful Conduct"

 

WASHINGTON, D.C. — In a landmark and politically charged move, President Donald Trump has fired Federal Reserve Board of Governors member Lisa Cook, accusing her of "deceitful and potentially criminal conduct" related to allegations of mortgage fraud. The action, which marks the first time a U.S. president has attempted to remove a sitting Fed governor, is expected to trigger a major legal battle over the central bank's independence.

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Allegations and White House Rationale 🏛️

The dismissal is tied to accusations that Cook, the first Black woman on the board, claimed two properties in Michigan and Georgia as her primary residence to secure more favorable mortgage terms.¹ The allegations were first made public by Bill Pulte, a Trump-appointed director of the Federal Housing Finance Agency (FHFA), who referred the matter to the Justice Department.

In a letter posted on his social media platform, Trump stated that Cook's alleged conduct demonstrated "gross negligence in financial transactions" that compromised her integrity as a financial regulator. He declared that he had "sufficient cause" for the removal. The Department of Justice is reportedly investigating the claims, but Cook has not been charged with or convicted of any crime.

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Legal and Political Ramifications ⚖️

Cook's firing raises significant legal questions, as the Federal Reserve Act stipulates that governors can only be removed "for cause."³ This legal provision is designed to insulate the central bank from political pressure and has historically been interpreted by courts as requiring clear professional wrongdoing or misconduct, not policy disagreements.⁴ Senator Elizabeth Warren and other critics have condemned the move as an "authoritarian power grab" and a direct violation of the Fed's statutory independence.

The dismissal is seen as an escalation of Trump's broader campaign to exert control over the Federal Reserve.⁶ With this firing and the recent resignation of another governor, Trump could now have the opportunity to appoint two new members to the seven-member board, potentially giving his appointees a majority and shifting the institution's policy stance toward lower interest rates. Cook's removal is likely to be contested in court, where legal experts suggest she could be allowed to remain in her position while the case is litigated.