President Donald Trump announced late Monday that he is firing Federal Reserve Governor Lisa Cook, citing allegations of mortgage fraud. The move marks a dramatic escalation in his effort to assert control over the central bank.

Allegations of Mortgage Fraud

The accusations stem from claims by Bill Pulte, a Trump appointee to the agency overseeing Fannie Mae and Freddie Mac. Pulte alleged that in 2021, Cook listed two primary residences — one in Ann Arbor, Michigan, and another in Atlanta — to obtain better mortgage terms.

Mortgage rates are typically higher for second homes or rental properties.

Fight Over Fed Independence

Cook, who had already resisted Trump’s earlier calls to resign, was one of seven members on the Fed’s governing board. Her removal raises significant questions about the Fed’s independence from political pressure.

Trump insisted he has constitutional authority to remove her, but legal experts say the move will likely trigger a court battle. Cook may be allowed to keep her seat while the case proceeds.

Broader Push for Control

The firing comes as part of Trump’s wider push to reshape the Fed. He has long criticized Chair Jerome Powell for not cutting interest rates and has threatened to fire him as well.

Removing Cook would give Trump a chance to appoint an ally who supports his stance on lowering rates.

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