President Donald Trump escalated his pressure campaign on the Federal Reserve Friday, vowing to fire Governor Lisa Cook if she does not resign.
The threat comes amid allegations of mortgage fraud leveled against Cook by Federal Housing Finance Agency Director Bill Pulte, a close ally of Trump.
Speaking to reporters during a visit to The People’s House, a museum of the White House, Trump said: “What she did was bad. So I’ll fire her if she doesn’t resign.”
Cook, who was appointed by former President Joe Biden in 2022, has denied wrongdoing and signaled she will not step down.
Allegations against Cook
Pulte, who has clashed publicly with Fed Chair Jerome Powell and backed Trump’s calls for lower interest rates, accused Cook of improperly claiming two properties as primary residences to obtain favorable mortgage terms.
Earlier this week, he said he sent a criminal referral to the Department of Justice, which confirmed on Thursday that it would investigate the claims.
Cook responded in a statement on Wednesday, saying she learned of the allegations through social media.
“I have no intention of being bullied to step down from my position because of some questions raised in a tweet,” she said.
She added that she is gathering records to provide accurate information about her financial history.
Cook has consistently voted in line with Powell, most recently siding with the majority to keep interest rates unchanged at the Federal Open Market Committee’s meeting last month.
Implications for the Federal Reserve
If Cook were removed, Trump would gain the opportunity to reshape the Fed’s Board of Governors more decisively.
Two of the current seven members — Christopher Waller and Michelle Bowman — are Trump appointees, both of whom dissented from the Fed’s latest decision to hold rates steady.
Another seat opened earlier this summer when Adriana Kugler announced her resignation.
Combined with the potential vacancy left by Cook, Trump could fill four of the seven board slots, creating a majority aligned with his views on monetary policy.
Governors serve 14-year terms, meaning such appointments could influence policy for decades.
Ed Martin, a Justice Department lawyer seen as close to the administration, has urged Powell to remove Cook.
However, under current law, the Fed chair does not have the authority to dismiss board members.
Political pressure and central bank independence
Trump’s remarks about Cook are the latest in a series of criticisms of the central bank.
He has repeatedly attacked Powell over interest rate policy and budget overruns tied to renovations of the Fed’s Washington headquarters.
The controversy comes as Powell delivered his keynote address at the Federal Reserve’s annual conference in Jackson Hole, Wyoming.
Powell, in his speech, said that interest rate cuts could be considered in the coming months
The event traditionally draws central bankers from around the world and often sets the tone for future monetary policy.
Trump’s comments and Pulte’s allegations highlight the broader tension between the White House and the central bank, raising questions about the Fed’s independence at a pivotal moment for global markets.
Cook, whose term runs until 2038, has pledged to continue fulfilling her duties despite the scrutiny.
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