Trump ousts Federal Reserve governor Lisa Cook over fraud allegations

In a significant political maneuver, President Donald Trump dismissed Federal Reserve Governor Lisa Cook on August 25, 2025, amidst serious allegations of mortgage fraud. Trump cited misconduct involving false statements on mortgage applications as grounds for her removal. The allegations originated from a report by Bill Pulte, the Director of the Federal Housing Finance Agency, who accused Cook of claiming two different properties as her primary residence. This dismissal follows months of public criticism from Trump directed at the Federal Reserve and its monetary policy. Cook, who was appointed to the Federal Reserve Board in 2022 by President Joe Biden, faced pressure from the Trump administration over interest rates and monetary policy, which has historically been independent from political influence. The president, after urging Cook to resign, stated he acted out of concern for the Federal Reserve's integrity, emphasizing the need for honesty among its officials. He expressed distrust in Cook's capability to perform her duties, claiming her actions were deceitful and potentially criminal. Following Cook’s refusal to step down despite Trump's calls, the situation escalated into a constitutional crisis regarding the president's authority to remove a sitting Federal Reserve governor. According to federal law, members of the Federal Reserve serve 14-year terms and can only be dismissed for cause. This unprecedented action has raised questions about the independence of the Federal Reserve and could trigger legal disputes. Cook has not been charged with any crime, and the allegations are currently under investigation. The broader implications of this dismissal reflect Trump's continued efforts to influence the central bank's policies. As the Fed has raised interest rates to combat inflation, Trump has demanded cuts in an effort to stimulate economic growth ahead of elections, showcasing his alignment with pro-business sentiments. The dismissal of a Fed governor for alleged misconduct also opens the door for Trump to appoint a replacement aligned with his financial policies, potentially altering the landscape of monetary governance in the U.S. and underscoring the ever-blurring lines between political authority and economic institutions.