Governor Lisa Cook fired: Trump triggers a Fed showdown like never before

President Donald Trump on Monday fired Federal Reserve Governor Lisa Cook, accusing her of mortgage fraud in a move that marks the most aggressive intervention against the Fed’s independence by a sitting president in U.S. history.

In a letter posted to Truth Social, Trump cited “deceitful and potentially criminal conduct” involving Cook’s mortgage applications, alleging she falsely claimed two separate homes as her primary residence.

“In light of your deceitful and potentially criminal conduct in a financial matter, [the American people] cannot and I do not have such confidence in your integrity,” Trump wrote, calling her actions “gross negligence in financial transactions.”

Cook, appointed by President Joe Biden in 2022, is the first Black woman to serve as a Federal Reserve governor. She denied wrongdoing last week, stating that she learned of the allegations through media reports and is preparing to address them “seriously.”

The removal—posted publicly before any court ruling or formal investigation—may spark a constitutional showdown. The Federal Reserve Act limits presidential authority to fire a Fed governor, allowing removal only “for cause,” a standard historically tied to clear misconduct or dereliction of duty.

Sen. Elizabeth Warren called the firing “an authoritarian power grab” and urged courts to block it, warning, “It blatantly violates the Federal Reserve Act.”

The criminal referral at the center of the controversy came from Federal Housing Finance Agency Director William Pulte, a Trump appointee and critic of Fed Chair Jerome Powell. Trump cited Pulte’s claims in his letter, detailing two separate mortgage filings Cook allegedly signed weeks apart.

Trump had previously threatened to fire Powell and recently asked lawmakers if he should proceed. While denying an immediate plan to oust Powell, Trump signaled openness if “fraud” were involved.

If Cook’s termination holds and Trump secures Senate approval for two pending nominees, he would gain a 4–3 majority on the Fed board. Markets reacted immediately: the dollar index dropped 0.3%, 2-year Treasury yields dipped, and gold rose 0.3%.