On Friday, President Trump stated that he would dismiss Federal Reserve Board member Lisa Cook if she does not resign from the central bank. Trump made this announcement during his visit to “The People’s House,” a museum in Washington D.C. with the theme of the White House. He expressed his dissatisfaction with Cook’s actions, calling them poor, and emphasized that if she does not resign, he will terminate her employment.
Cook, the first African-American woman to serve on the Federal Reserve Board, was asked to resign by Trump on Wednesday due to allegations of mortgage fraud during a home purchase several years ago. In response, Cook expressed her refusal to resign because she does not intend to be bullied.
The Department of Justice announced on Thursday that they will investigate the allegations of fraud against Cook. This investigation follows a criminal referral from the Federal Housing Finance Agency.
Trump has been pushing for interest rate cuts from the Federal Reserve, but Federal Reserve Chairman Jerome Powell has been reluctant to do so. Powell stated that he, along with other policymakers at the central bank, are closely monitoring the impact of Trump’s new tariff measures on inflation and employment.
Cook was appointed as a Federal Reserve Board member by former Democratic President Biden. If she resigns, Trump will have the opportunity to reshape the composition of the Federal Reserve Board before Powell’s term as chairman ends in May 2026, potentially influencing the board for years to come. The term for Federal Reserve Board members is 14 years.
Among the current seven board members of the Federal Reserve, both Christopher Waller and Michelle Bowman were appointed by Trump during his first presidential term. Recently, both have opposed the decision to maintain interest rates by the Federal Reserve.
Earlier this month, another Biden-appointed Federal Reserve Board member, Adriana Kugler, resigned. Trump has nominated Stephen Miran, the Chairman of the White House Economic Advisory Committee, to fill this vacancy, pending confirmation by the U.S. Senate.
If Trump dismisses Cook, he will nominate a candidate who supports interest rate cuts to replace her, effectively ensuring that the majority of the Federal Reserve Board members share his views on monetary policy.
Bill Pulte, the Director of the Federal Housing Finance Agency, emphasized the seriousness of mortgage fraud when announcing the criminal referral to the Department of Justice regarding Cook’s case. Cook could face up to 30 years in prison for mortgage fraud, and Pulte urged her to resign voluntarily.
Based on evidence provided by the Federal Housing Finance Agency, in 2021, Cook obtained mortgages for properties in Michigan and Georgia, claiming in the loan terms that they would be used as primary residences. However, these two purchases were made within a span of over two weeks, and evidence of the Georgia property being listed for rent was discovered. This led to the determination that Cook intended to use the property for investment or rental purposes, rather than as a primary residence, potentially constituting mortgage fraud.