Trump fires Fed Governor Cook over alleged mortgage fraud

Updated with additional information about Trump and the Fed as of 8:37pm ET (00.37 GMT)

Investing.com — U.S. President Donald Trump announced the immediate dismissal of Federal Reserve Governor Lisa Cook on Monday evening, alleging that Cook misrepresented two mortgage applications.

Cook's ouster represents a new attack by Trump on the Fed, with the president repeating calls for the central bank to cut interest rates immediately. But Cook's ouster is also expected to spark a high-profile legal battle that could keep him in office until a decision is made.

In a letter posted on social media, Trump stated that there was “ample reason” for Cooke's dismissal.

Trump said in his letter: “There is ample reason to believe that Cook may have made misrepresentations in one or more mortgage deals.” Trump claimed Cook declared two separate properties as his primary residence in two separate mortgage deals signed several weeks apart.

The allegations against Cook had been raised in early August by William Pulte, Director of the Federal Housing Finance Agency.

Pulte said Cook designated an apartment in Atlanta as his primary residence after obtaining a loan on his Michigan home, which he previously declared as his primary residence. He then called on US Secretary of Justice Pam Bondi to investigate, and Trump jumped on the claim.

In his letter, Trump stated that it was “implausible” that Cook was unaware of both commitments.

Cook, the first black woman to be appointed to the Fed board, denied Pulte's claims, saying, “I have no intention of bowing to bullying to leave my post because of some questions raised in a tweet.”

Reports earlier this week suggested that Trump wants to oust Cook as the president tries to gain more influence over the Fed. Trump has repeatedly called on social media for Cook's impeachment.

Cook is one of three Biden Fed appointees whose tenures extend beyond Trump's second administration, which could complicate the president's attempts to gain more influence over the central bank.

Two of the Fed's seven-member rate-setting board were nominated by Trump; likewise, President Jerome Powell was nominated by Trump. Powell largely rejected the president's calls for more interest rate cuts.

Interest rate cuts appear to be at the heart of Trump's attempts to gain more influence at the Fed. His two other appointees to the board — Governor Christopher Waller and Vice President for Supervision Michelle Bowman — voted in favor of a rate cut at the Fed's July meeting.

Trump also tried to oust Powell, claiming funds were mismanaged during a major revamp of the Fed's offices, but the Fed President largely denied this.

In his final speech at the Jackson Hole Symposium last week, Powell acknowledged that the central bank was warming to the idea of more interest rate cuts as some cooling was seen in the labor market.

The Trump administration has scrutinized many perceived political enemies through mortgage fraud investigations, including Democratic New York State Attorney General Letitia James and Democratic U.S. Senator Adam Schiff.

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