Lisa Cook, member of the Board of Governors of the US Federal Reserve, attends a Federal Reserve Board open assembly discussing proposed revisions to the board’s supplementary leverage ratio requirements on the Federal Reserve Board constructing in Washington, DC, on June 25, 2025.
Saul Loeb | AFP | Getty Images
President Donald Trump on Monday fired Federal Reserve Governor Lisa Cook, in line with a letter on his Truth Social, an unprecedented transfer and a major escalation of his assaults on the independence of the U.S. central financial institution.
“Pursuant to my authority under Article II of the Constitution of the United States and the Federal Reserve Act of 1913, as amended, you are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately,” Trump wrote.
CNBC reached out to the Federal Reserve for remark.
Trump’s transfer pushes the Federal Reserve into unchartered territory and can probably result in a authorized conflict that might wind up on the Supreme Court.
The Trump administration claims that Cook, who was nominated by former President Joe Biden in 2022, dedicated mortgage fraud by allegedly naming two completely different properties as her major residence on the identical time.
Federal Housing Finance Agency Director Bill Pulte, an outspoken critic of Fed Chairman Jerome Powell, publicly accused Cook of mortgage fraud on Aug. 20 and despatched a legal referral to the Justice Department.
Trump cites the legal referral in his letter and stated that “there is sufficient reason to believe you have made false statements on one or more mortgage agreements.”
“For example, as detailed in the Criminal Referral, you signed one document attesting that a property in Michigan would be your primary residence for the next year,” Trump wrote.
“Two weeks later, you signed another document for a property in Georgia stating that it would be your primary residence for the next year,” he continued.
Trump claimed that it’s “inconceivable” that Cook was “not aware of [her] first commitment when making the second.”
After Pulte’s claims began to flow into final week, Trump rapidly known as for Cook’s resignation, writing in a social media post that “Cook must resign, now!!!”
Cook stated in a statement the identical day that she has “no intention of being bullied to step down from my position because of some questions raised in a tweet.”
Two days later, Trump stated he would hearth Cook if she didn’t resign.
“What she did was bad,” Trump instructed reporters on Aug. 22.
Pulte applauded Trump’s transfer and thanked his “commitment to stopping mortgage fraud and following the law” in a post on X.
Trump’s firing will probably set off a authorized showdown. The Supreme Court might get entangled if a decide permits Cook to proceed serving in her position whereas authorized proceedings play out.
Congress curbed the president’s authority to unilaterally hearth a Fed governor within the Federal Reserve Act of 1913, which states that president can solely accomplish that “for cause.” While the legislation doesn’t elaborate on what constitutes “cause,” it has traditionally been understood to imply malfeasance or dereliction of obligation.
If Trump is in the end profitable in eradicating Cook, he’ll be capable of nominate her alternative and reshape the Fed’s governing board for the following a number of years. Fed governors sometimes serve 14-year phrases. Cook is the primary Black lady to function a governor of the Federal Reserve.
Two of the seven present Fed governors, Christopher Waller and Michelle Bowman, are Trump appointees. Trump nominated Powell to be the Chair of the Federal Reserve in 2017.
Another spot opened up earlier this yr when Adriana Kugler abruptly stepped down, giving Trump one other seat to fill. He has nominated Stephen Miran, chair of the Council of Economic Advisors, to fill the vacant seat.
The transfer exacerbates considerations surrounding the Federal Reserve’s independence beneath the Trump administration.
Trump has repeatedly criticized the central financial institution and its chair for not slicing short-term rates of interest.
Powell has to this point resisted Trump’s stress, even because the president has threatened to fireplace him earlier than his time period as chair expires subsequent yr.
Speaking on Aug. 22 on the central financial institution’s annual symposium in Jackson Hole, Wyoming, nonetheless, Powell recommended that conditions “may warrant” interest rate cuts as the Fed proceeds “carefully.”
The ICE U.S. Dollar index, which measures the dollar towards a basket of main currencies, shed 0.3% in a speedy transfer in a single day simply after Trump’s Cook submit.
The 2-year Treasury yield, a fee delicate to Fed strikes, ticked decrease by 4 foundation factors on the transfer. One foundation level equals 0.01%.
Stock futures had been decrease in in a single day buying and selling earlier than Trump’s announcement and continued a slight mover decrease. Gold futures had been the most important mover moreover the greenback, gaining 0.3%.
This is growing information. Please test again for updates.