Trump Demands Fed Governor Cook Resign

Trump presses for Lisa Cook to step down amid allegations, highlighting ongoing clashes over Fed independence and political influence.

Trump Demands Fed Governor Cook Resign

President Donald Trump called for Federal Reserve Governor Lisa Cook to resign after a housing agency director urged the Justice Department to investigate her. Bill Pulte, who runs the agency that oversees Fannie Mae and Freddie Mac, claimed Cook filed taxes on two primary residences to secure better mortgage terms and listed her Atlanta condo for rent. The Fed did not comment, and so did the Justice Department.

The episode underscores a broader fight over the Fed’s independence. Democrats, including Senate leaders, pushed back, defending Cook and warning against weaponizing government power to remove independent central bankers. The resistance comes even as Trump has pressed for faster rate reductions and questioned the costs of the Fed’s building renovations. The President could nominate replacements if Cook or Chair Jerome Powell leaves, a move that could shift board dynamics but would still face the board’s collective influence on rate decisions.

This episode shows how political pressure can collide with central bank independence. The Fed operates with a long tradition of insulation from day to day politics, but a shift in board composition could nudge monetary policy if a majority favors a different stance. The push to remove Cook, whether viewed as a response to alleged mortgage behavior or as a broader bid to install allies, risks turning a professional institution into a political prize. The long terms of serving governors mean today’s controversy could echo in policy years from now, shaping how lenders and borrowers react to rate moves and economic signals.

Highlights

The coming weeks will test how far politics will reach into the Fed's orbit.