President Donald Trump is turning up the heat on the Federal Reserve again — this time targeting one of its own governors. On Friday, Trump said he’ll fire Fed Governor Lisa Cook if she doesn’t resign, accusing her of mortgage-related misconduct.
“What she did was bad,” Trump told reporters during a surprise stop at The People’s House, a White House museum in Washington. “So I’ll fire her if she doesn’t resign.”
Cook, who was appointed by former President Joe Biden in 2022, has become the center of a political and financial storm after Federal Housing Finance Agency Director Bill Pulte accused her of committing mortgage fraud. Pulte claims Cook declared two separate homes — one in Michigan and one in Georgia — as her “primary residence” in 2021, just before she joined the Fed board. He’s since referred the case to the Justice Department, which has opened an investigation.
The allegations couldn’t come at a more politically charged moment. If Trump manages to remove Cook “for cause” — a legal gray area that would almost certainly be challenged — he’d get another chance to reshape the Fed’s powerful board of governors. With two of his allies already sitting on the seven-member board and one seat currently vacant, Cook’s departure could tip the balance toward Trump loyalists, potentially steering US monetary policy for years.
Cook, however, is not budging. In a statement this week, she said she had “no intention of being bullied to step down” and would address the questions about her finances head-on.
“I do intend to take any questions about my financial history seriously as a member of the Federal Reserve,” she added.
Critics see Trump’s threats as part of a broader campaign to weaken Fed Chair Jerome Powell, whom Trump has spent years bashing for keeping interest rates higher than he wants. Powell, speaking the same day at the Fed’s annual gathering in Jackson Hole, Wyoming, signaled that rate cuts may be on the horizon — but not at the pace Trump has been demanding.
Meanwhile, Democrats came to Cook’s defense. Rep. Maxine Waters, the top Democrat on the House Financial Services Committee, blasted Trump’s actions as a thinly veiled attempt to undermine the Fed’s independence.
“The allegations against Dr. Cook have been cobbled together as a pretext to replace her with someone loyal to Trump,” she said.
Cook, a highly respected economist and the first Black woman to serve on the Fed board, was confirmed in a razor-thin Senate vote in 2022. Her term runs until 2038.
The legal reality is that firing a Fed governor isn’t easy — presidents can only remove them “for cause,” a phrase so vague it’s rarely been tested. Still, Trump’s blunt threat underscores just how far he’s willing to go to reshape the central bank in his image.
And markets are paying attention: Trump’s comments sent the dollar lower, bond yields higher, and gold prices climbing — a reminder that every word on this feud carries real financial weight.
The New York Times, CNBC, Reuters, and Bloomberg contributed to this report.
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