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In a groundbreaking and highly controversial action, President Donald Trump announced on Monday, August 25, 2025, that he has fired Federal Reserve Governor Lisa Cook.
This has marked the first time in the central bank’s 111-year history that a president has removed a governor from office.
The decision, detailed in a letter posted on Trump’s social media platform Truth Social, accuses Cook of “deceitful and potentially criminal conduct” related to mortgage applications.
This has escalated his ongoing feud with the Fed over its reluctance to slash interest rates aggressively.
Cook, appointed by President Joe Biden in May 2022 and the first Black woman to serve on the Fed’s Board of Governors, has not been charged with any wrongdoing.
Her term was set to run until 2038, but Trump’s move opens a new vacancy on the seven-member board, potentially allowing him to appoint another ally and shift the balance toward his preferred monetary policies.
Allegations of Mortgage Fraud Spark White House Offensive
The controversy stems from claims first raised last week by Federal Housing Finance Agency (FHFA) Director Bill Pulte, a Trump appointee and vocal critic of the Fed.
Pulte alleged that Cook committed mortgage fraud in 2021—prior to her Fed appointment—by declaring two separate properties in Michigan and Georgia as her primary residences to secure more favorable loan terms.
He submitted a “criminal referral” to the Justice Department, which has confirmed it will investigate the matter.
A review of public mortgage documents shows Cook obtained loans for both homes, listing each as her principal residence, though it’s unclear if this was intentional or resulted in any financial gain.
Pulte, who has repeatedly called for Fed Chair Jerome Powell’s resignation and lower rates, applauded Trump’s decision on X, thanking the president for his “commitment to stopping mortgage fraud.”
Trump’s letter to Cook states: “I have determined that there is sufficient cause to remove you from your position… In light of your deceitful and potentially criminal conduct in a financial matter… I do not have such confidence in your integrity.”
He further described the actions as exhibiting “gross negligence” that questions her competence as a financial regulator.
Cook responded last week to initial threats of removal, stating she had “no intention of being bullied” into resigning and was gathering facts to address the allegations.
The Fed declined to comment on the firing.
Legal Uncertainty
The Federal Reserve Act of 1913 allows presidents to remove governors only “for cause,” a term left undefined but historically interpreted as requiring evidence of malfeasance or incompetence, not policy disagreements.
Legal experts doubt Trump’s authority, predicting court challenges that could reach the Supreme Court.
A May 2025 Supreme Court ruling suggested presidents lack unilateral power to fire Fed governors without substantial justification.
It’s unclear if Cook must vacate her seat immediately or if the firing holds during litigation.
The Fed’s next policy meeting is September 16-17, 2025, where rate cuts are anticipated following Powell’s recent signals at the Jackson Hole symposium.
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About The Author
Financial Desk Team 
Frank Nez 
FrankNez Media 
News Desk 
Alexandria Reyes 
