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DOJ Pushes Fed to Remove Governor Lisa Cook, Sparks Showdown

DOJ Pushes Fed to Remove Governor Lisa Cook, Sparks Showdown
Source: AFP

The United States Department of Justice is reportedly pushing for an investigation into Federal Reserve Governor Lisa Cook and pressuring Fed Chair Jerome Powell to remove her from the board, according to Bloomberg News.

The move came in a letter from DOJ official Ed Martin, who said Cook’s case “requires further examination” and even urged Powell to act quickly: “Do it today before it is too late!”

The DOJ has not publicly commented, but the push comes just days after President Donald Trump called for Cook’s resignation, citing questions over mortgages she holds in Michigan and Georgia. Cook, however, said she has no plans to be “bullied” into stepping down.

Under the Federal Reserve Act, Powell doesn’t have the authority to remove another governor. Cook, who became the first Black woman to serve on the Fed’s board, is in the middle of a 14-year term confirmed by the Senate in 2023.

The pressure on Cook ties into Trump’s broader push to reshape the central bank, as his administration has ramped up opposition to diversity, equity and inclusion (DEI) initiatives and called for deep interest rate cuts.

The timing of the controversy is awkward: central bankers from around the world are gathering at the Jackson Hole symposium in Wyoming, where Powell is set to give a major speech on Friday.

Some colleagues have spoken out in Cook’s defense. Cleveland Fed President Beth Hammack said she knows Cook to be an “outstanding economist and a person of high integrity.”

The allegations stem from a referral by William Pulte, head of the Federal Housing Finance Agency, who claimed Cook committed mortgage fraud. “The records are clear,” he told Bloomberg, insisting no one should be above accountability.

Cook has not addressed the details directly but promised to review her financial history and “provide the facts” where necessary.

The Fed has kept rates steady this year at 4.25–4.5 percent, trying to balance inflation and slowing job growth. Markets are betting on a small rate cut in September, but Trump has repeatedly pushed for much steeper reductions.

Looking ahead, Powell’s leadership term ends in May, and Trump will be able to nominate a new chair. His team, led by Treasury Secretary Scott Bessent, already has candidates lined up — all of them backing aggressive rate cuts and big shifts at the Fed.

Cook’s future now hangs in the balance as the Fed, DOJ, and Trump administration wrestle over who holds sway over America’s most powerful economic institution.

 

 

Michelle Larsen

Michelle Larsen is a 23-year-old journalist and editor for Wyoming Star. Michelle has covered a variety of topics on both local (crime, politics, environment, sports in the USA) and global issues (USA around the globe; Middle East tensions, European security and politics, Ukraine war, conflicts in Africa, etc.), shaping the narrative and ensuring the quality of published content on Wyoming Star, providing the readership with essential information to shape their opinion on what is happening. Michelle has also interviewed political experts on the matters unfolding on the US political landscape and those around the world to provide the readership with better understanding of these complex processes.