Trump dismisses Fed Governor Lisa Cook in unprecedented central bank shake-up

Lisa Cook, appointed by President Biden and the first Black woman to serve on the Federal Reserve Board, has become the first sitting governor in modern history to be removed by a president.

President Donald Trump invoked a seldom-used statute permitting removal “for cause,” citing allegations of mortgage fraud as grounds for Cook’s dismissal in an August 25 letter.

According to Trump’s letter, Cook allegedly claimed two different properties as her primary residence in order to secure favorable mortgage terms—a case referred to federal authorities by the Federal Housing Finance Agency (FHFA). The controversy had intensified calls from Trump and his allies for her resignation.

Cook has denied wrongdoing and pledged to cooperate with any financial review. Federal Reserve officials have publicly defended her, emphasizing the need for factual clarity before reaching conclusions.

“You signed a document attesting that a property in Michigan would be your primary residence for the next year. Two weeks later, you signed another document for a property in Georgia stating that it would be your primary residence for the next year. It is inconceivable that you were not aware of your first commitment when you made the second,” Trump wrote, adding that the Fed requires “complete public confidence in the honesty of its members.”

Cook, who had advocated for a potential interest rate cut at the Fed’s September meeting, now faces an unprecedented removal likely to trigger legal challenges.

Representative Jerry Nadler criticized the move, calling it “clearly illegal” and asserting that the Federal Reserve Act limits removal to serious misconduct. He added that Trump’s actions risk undermining financial stability and should be challenged in court.