US President Donald Trump is threatening to fire Federal Reserve Governor Lisa Cook, the first Black woman to serve on the central bank’s governing body, over alleged “deceitful and potential criminal conduct” related to mortgages she took out in 2021.
Trump claims that Cook had described separate properties in Michigan and Georgia as primary residences on mortgage applications before joining the Fed in 2022. However, Cook’s lawyer, Abbe Lowell, argues that Trump’s attempt to fire her lacks any factual or legal basis.
The move has raised concerns about the independence of the US central bank and the potential for a more dovish composition of Fed policymakers. It follows other efforts by Trump to bring elements of the US government under his direct control, including the departure of hundreds of thousands of civil servants and the dismantling of several agencies.
Cook’s removal would allow Trump to pick a majority of the Fed’s seven-member board, potentially influencing monetary policy decisions. The Fed has stated that Cook serves a 14-year term and cannot be removed easily from office.
Academic research suggests that policymakers allowed to manage inflation independent of political meddling achieve better outcomes. The US Federal Reserve next meets on September 16-17 to set interest rates.
Trump’s actions have sparked fears of global financial turmoil, with the dollar dropping and Wall Street’s main equities indexes closing slightly higher on Tuesday.
Source: https://www.reuters.com/business/finance/fed-governor-cook-will-sue-keep-her-job-trump-mulls-replacement-2025-08-26