The Trump administration has intensified its campaign against the Federal Reserve, pressuring Chair Jerome Powell to oust Governor Lisa Cook after unconfirmed allegations of mortgage fraud surfaced. Cook, appointed by Joe Biden, has firmly rejected calls to resign, declaring she will not be “bullied” out of her post. The Justice Department is reportedly reviewing the accusations, though neither the Fed nor the DOJ has issued public comment.
Rising Pressure on Fed
The White House has escalated its feud with the Federal Reserve, demanding Cook’s removal as part of a broader clash over the central bank’s independence. Former president Donald Trump, who has repeatedly demanded interest rate cuts, personally urged Cook to resign this week. Administration officials claim the allegations of mortgage fraud disqualify her from serving, though the accusations remain unverified.
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Trump’s Direct Demands
In a letter obtained by Bloomberg, senior Trump official Ed Martin pressed Powell to act immediately. “At this time, I encourage you to remove Ms Cook from your Board,” he wrote. “Do it today before it is too late! After all, no American thinks it is appropriate that she serve during this time with a cloud hanging over her.” Despite the demands, Powell has no legal authority to remove a governor under the Federal Reserve Act.
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DOJ Review Underway
Reports suggest the Department of Justice has indicated it is looking into the allegations. However, both the Fed and the DOJ declined to comment on the matter. The Wall Street Journal further revealed that Trump has explored ways to fire Cook “for cause,” though the White House has yet to respond to inquiries.
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Allegations of Mortgage Fraud
Bill Pulte, head of the US Federal Housing Finance Agency and a vocal Trump ally, released details accusing Cook of misleading mortgage lenders. According to Pulte, Cook secured a 15-year mortgage in June 2021 for a property in Ann Arbor, Michigan, declaring it her primary residence. Just a month later, she purchased another home in Atlanta, Georgia, also claiming it as her principal residence when applying for a 30-year loan. Pulte said investigators are now examining a third property tied to Cook.
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Cook’s Defiant Response
Cook dismissed efforts to pressure her into resigning, vowing to cooperate with any legitimate inquiry. “I do intend to take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions and provide the facts,” she said in a statement. She emphasized she would not be intimidated by political attacks.
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Wider Pattern of Accusations
Cook is not the first high-profile Democrat accused of mortgage fraud by Trump allies. Similar claims have been leveled against New York Attorney General Letitia James and California Senator Adam Schiff. James called the accusations “baseless,” while Schiff described them as politically motivated and accused the administration of weaponizing the justice system for partisan gain.
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A Threat to Fed Independence
The push against Cook marks the latest chapter in Trump’s unprecedented effort to undermine the independence of the Federal Reserve. His repeated public attacks on Powell and other Fed officials highlight a growing political battle that could reshape the central bank’s role. Observers warn the targeting of Cook underscores how partisan fights are spilling into traditionally independent institutions.