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By Adeola Adeosun
Weekend Night Editor
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President Donald Trump has fired Federal Reserve Governor Lisa Cook late Monday night, citing allegations of mortgage fraud in a surprise move that marks a significant escalation in his efforts to exert control over the traditionally independent central bank.
Newsweek reached out to the Board of Governors of the Federal Reserve for comment via online form on Monday.
Why It Matters
The announcement, posted on Trump's Truth Social, came days after Cook said she would not resign from the seven-member Fed board despite Trump's previous calls for her departure.
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"I have no intention of being bullied to step down from my position because of some questions raised in a tweet," Cook said in a statement last week.
What To Know
Cook's firing on Monday stems from allegations made last week by Bill Pulte, a Trump appointee to the agency overseeing mortgage giants Fannie Mae and Freddie Mac.
Pulte accused Cook, who was appointed by President Joe Biden, of claiming two primary residences—one in Ann Arbor, Michigan, and another in Atlanta—in 2021 to secure more favorable mortgage terms. Mortgage rates are typically higher for second homes or investment properties.
In his termination letter dated August 25, 2025, Trump wrote: "The executive power of the United States is vested in me as President and, as President, I have a solemn duty to ensure that the laws of the United States are faithfully executed. I have determined that faithfully executing the law requires your immediate removal from office."
Trump said his decision to remove Cook falls within his constitutional authority as president.
The letter continued: "The Federal Reserve has tremendous responsibility for setting interest rates and regulating reserve and member banks. The American people must be able to have full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve. In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity."
The timing of Cook's firing is significant as it comes amid Trump's efforts to force the Federal Reserve to lower interest rates. Jerome Powell, the chair of the central bank, signaled in recent days that the Fed may cut rates soon, adding that with inflation ticking up and the job market cooling down, the central bank is in a "challenging situation."
Trump has repeatedly criticized Powell for not cutting the Fed's short-term interest rate more aggressively and has even threatened to fire him. The president has also made clear he would only appoint officials who support cutting rates.
What People Are Saying
President Donald Trump said in his termination letter: "At a minimum, the conduct at issue exhibits the sort of gross negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator."
Emily Gee, senior vice president for Inclusive Growth at the Center for American Progress, said in a statement: "This is a reckless, self-serving move by Trump to install his own loyalists and dangerously erode Fed independence. It's the latest desperate effort by Trump to bully an independent agency to take actions contrary to the best interests of our nation's economy. Abusing his power to target his political enemies is a real threat to our democracy and Americans' financial wellbeing."
Political influencer Harry Sisson said on X: "Donald Trump just announced that he fired Federal Reserve Governor Lisa Cook, which is blatantly unconstitutional and authoritarian. This should be challenged in court ASAP!"
Roger Stone said on X: "Federal Reserve Governor Lisa Cook is cooked. Said her home in Ann Arbor, Mich. was her principal legal residence getting a state tax break and a lower mortgage and insurance rate. Two weeks later, she said her home outside of Atlanta was her principal legal residence getting a state tax break and a lower mortgage and insurance rate. This is mortgage fraud."
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What Happens Next
The firing will likely trigger a legal battle over presidential authority to remove Fed governors.
Update 8/25/25, 10:40 p.m. ET: This article has been updated with additional information and context.
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