Trump says he’s removing Federal Reserve Gov. Lisa Cook, citing his administration’s allegations of mortgage fraud

President Donald Trump is removing Federal Reserve Governor Lisa Cook effective immediately, according to a letter he posted to Truth Social on Monday night.

In the letter, Trump writes: “Pursuant to my authority under Article II of the Constitution of the United States and the Federal Reserve Act of 1913, as amended, you are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately.”

Trump cites a “criminal referral” from Federal Housing Finance Agency Director William Pulte, in which Pulte accused Cook of mortgage fraud.

In a statement, Cook responded by saying: “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so. I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”

Her attorney Abbe Lowell said in an accompanying statement that Trump’s “reflex to bully is flawed and his demands lack any proper process, basis or legal authority. We will take whatever actions are needed to prevent his attempted illegal action.”

Under the Federal Reserve Act, the only reason Federal Reserve governors can be removed from their positions is “for cause,” or some kind of wrongdoing.

Cook has not been charged with any crime, and her removal is likely to lead to a court battle between the independent central bank and the executive branch.

The Supreme Court said in May, while granting Trump the ability to remove members of other independent agencies, that the Federal Reserve is a “uniquely structured, quasi-private entity” that has its own distinct historical tradition. That led many to believe the bar would be high for Trump to be able to remove any Fed board members or its chairman.

Sen. Elizabeth Warren of Massachusetts, the top Democrat on the Banking Committee, said in a statement: “The illegal attempt to fire Lisa Cook is the latest example of a desperate President searching for a scapegoat to cover for his own failure to lower costs for Americans. It’s an authoritarian power grab that blatantly violates the Federal Reserve Act, and must be overturned in court.”

Spokespeople for Senate Banking Committee Chairman Tim Scott, R-S.C., did not immediately respond to a request for comment.

Cook said in a statement last week that she had “no intention of being bullied to step down from my position because of some questions raised in a tweet.”

“I do intend to take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions and provide the facts,” she said at the time.

Cook is the first Black woman to serve on the board of the Fed, considered the world’s most important independent central bank.

Monday’s move against Cook came amid an unrelenting pressure campaign by Trump against the central bank, with Trump and his top aides and allies repeatedly attacking the institution and its chair, Jerome Powell, over current interest rate policies.

Trump has attacked Powell almost nonstop, calling him “stupid” and saying he “hates me.” Trump has also said the board, which Cook serves on, “should be ashamed of themselves.”

After Pulte alleged that Cook committed mortgage fraud, Trump quickly reposted his allegations, saying on Truth Social that she “must resign, now!!!”

Pulte said on X after Trump announced Cook’s removal, “Fraud will not be tolerated in President Trump’s housing market.”

Pulte’s focus on Cook’s mortgage documentation is just the latest in a series of similar accusations against high-ranking Democrats, such as Sen. Adam Schiff of California and New York Attorney General Letitia James.

He added in a second post, “If you commit mortgage fraud in America, we will come after you, no matter who you are.”

The U.S. Dollar Index, a measure of the dollar’s strength against a basket of global currencies, declined sharply on Trump’s announcement.

Cook, who has a permanent vote on the central bank’s rate-setting committee, was appointed by President Joe Biden to a term running until 2038.

If she is removed from the Fed’s board and its rate-setting committee, Trump would gain another opportunity to put his mark on the central bank.

Trump has nominated his top economist, Stephen Miran, to the Fed’s board for a term that would run until January. Trump will also have a chance to name a new chair when Powell’s term ends in May.

Trump appointed Fed governors during his first term — Michelle Bowman and Christopher Waller. Both are still serving in those roles. However, interest rates change only when a majority of the 12-member committee votes to do so, and a total of four Trump appointees would still be in the minority.

The committee consists of the Fed chairperson, six Fed governors, the Federal Reserve Bank of New York president and four other regional Fed presidents on a rotating basis, who represent districts across the country.

“This is a new attempt of the administration to gain more control over the Fed. They’re pulling as many different levers as they can find to get that control,” former Fed economist Claudia Sahm recently told Bloomberg News.