US President Donald Trump recently accused Federal Reserve Governor Lisa Cook of committing mortgage fraud by allegedly falsifying bank documents and property records to acquire better loan terms. However, the investigation’s unusual start raises questions about its strength.
On August 20th, Bill Pulte, head of the Federal Housing Finance Agency, published a letter alleging Ms Cook’s involvement in the alleged wrongdoing. He then tweeted a screenshot showing her signature on two documents, sparking President Trump’s interest and threatening to sack her.
Despite this unusual start, courts will consider what is required to remove a Fed governor “for cause.” There is little precedent for such an action, as no Fed governor has been dismissed for cause before.
The investigation’s reliance on Ms Cook’s signature on the documents raises concerns about its credibility. Additionally, Trump’s decision to accuse her of mortgage fraud without evidence undermines his own interest-rate crusade and threatens the stability of the Federal Reserve.
This unusual case highlights the importance of due process and the need for thorough investigations in high-profile cases. As the courts weigh the evidence against Ms Cook, it is essential to ensure that any findings are based on credible evidence rather than speculation or accusations without proof.
Source: https://www.economist.com/finance-and-economics/2025/08/27/assessing-the-case-against-lisa-cook