Trump's Controversial Move: Lisa Cook's Alleged Mortgage Fraud and Federal Reserve Fallout

Sat Sep 13 2025 12:38:50 GMT+0300 (Eastern European Summer Time)

President Trump's demand for Lisa Cook's removal as Federal Reserve governor raises alarms over political interference and the implications for US economic policy.

President Donald Trump has ordered the removal of Federal Reserve governor Lisa Cook, citing allegations of mortgage fraud. This action has spurred outrage among Democrats, who claim it signals unprecedented political interference in the central bank. Cook, who was appointed in 2022, denies wrongdoing and asserts she will fight against her dismissal. The implications of Trump's actions extend to the future of US monetary policy, as the Fed plays a crucial role in setting interest rates and managing economic stability.

Trump's Controversial Move: Lisa Cook's Alleged Mortgage Fraud and Federal Reserve Fallout

President Donald Trump has demanded the removal of one of the governors of the US central bank, escalating his long-standing feud with the institution. In a post on his Truth Social account, Trump announced Lisa Cook's dismissal from the Federal Reserve Board due to allegations of mortgage fraud.

Cook, who became the first African American to serve as a Federal Reserve governor upon her appointment by Democratic President Joe Biden in 2022, faces accusations of falsifying records related to mortgage applications. According to Trump, she allegedly claimed two separate homes in different states as her primary residence, raising questions about her integrity.

The response from the Democratic party has been swift, condemning Trump's actions as unprecedented political interference with the Federal Reserve, an institution traditionally seen as independent from direct political influence. Cook's term was set to last until 2038, adding further complexity to the unprecedented nature of her ousting.

Trump cited a so-called criminal referral against Cook in his letter, despite the fact that she has not been charged with a crime. This situation may lead to a legal battle, as the Federal Reserve Act does not explicitly grant the president the power to remove a Fed official without just cause.

What Happens Next?

Market reactions to Trump's announcement have remained relatively subdued, with many investors awaiting further developments. Economically, Cook has cast votes to maintain current interest rates, a significant factor in determining monetary policy and economic stability.

As this political drama unfolds, the future of the Federal Reserve's independence and the implications for US monetary policy remain precarious. Trump’s push for lower interest rates alongside threats against Cook could reflect larger aims for economic adjustments as he seeks to maintain favorable conditions for American businesses.