President Trump Fires Federal Reserve Governor Lisa Cook

This just happened minutes ago as I write this so the news is only on Truth Social and X at the moment:

🚨 President Donald J. Trump relieves Federal Reserve Governor Lisa Cook of her position pic.twitter.com/tJV8m4mlHW

— Rapid Response 47 (@RapidResponse47) August 26, 2025

CNBC is the first to get a story up:

“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 wrote…

Congress curbed the president’s authority to unilaterally fire a Fed governor in the Federal Reserve Act of 1913, which states that president can only do so “for cause.” While the law does not elaborate on what constitutes “cause,” it has historically been understood to mean serious concerns about an official’s ability to continue serving.

The cause in this case, which is stated in the letter, is a criminal referral accusing Cook of mortgage fraud. CNN published a story on this earlier today which suggests the allegations are true but tries to leave some wiggle room anyway.

The Justice Department last week said it plans to investigate Cook after Federal Housing Finance Agency Director Bill Pulte alleged in a letter that she claimed two properties — a home in Ann Arbor, Michigan, and a condo in Atlanta — as her primary home addresses within two weeks of purchasing each with financing. Pulte accused her of having “falsified bank documents and property records.”…

In mortgage documents filed in 2021 and reviewed by CNN, Cook pledged to live in her Ann Arbor home as her primary residence for at least one year, unless her lender agreed otherwise or unforeseen circumstances arose.

Just two weeks later, she made the same pledge in mortgage documents for her Atlanta condo, according to records reviewed by CNN…

“If mortgage fraud is proven and the case proceeds to sentencing, it’s typically charged as a federal crime,” said Patrick Delahunty, a former federal prosecutor who now works as an attorney focused on white-collar criminal investigations…

He added that Cook may have simply erred by designating both homes as her primary residence, noting that the complexity of the mortgage process is often used as a defense in such cases.

I’m sorry but no. The complexity of home mortgages might fly in defense of a regular person who has limited knowledge of how the system works, but a member of the FED probably ought to know the most basic rule about getting a mortgage. Here’s Bill Pulte’s response to the firing.

US FEDERAL HOUSING STATEMENT ON THE FIRING OF LISA COOK:

Thank you President Trump for your commitment to stopping mortgage fraud and following the law. If you commit mortgage fraud in America, we will come after you, no matter who you are.

William J. Pulte
Director

— Pulte (@pulte) August 26, 2025

Cook hasn’t denied any wrongdoing exactly but has refused to resign her position.

In response to Pulte’s accusations, Cook said in a statement that she has “no intention of being bullied to step down from my position.”

“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.

The hitch in this firing is that Cook hasn’t been convicted of anything which means it’s open to interpretation whether or not she can be removed for cause. That issue will certainly wind up in the courts.

Lev Menand, a professor at Columbia Law School and former economist at the Federal Reserve Bank of New York, said he thought the allegations so far against Ms. Cook were “not sufficient” enough to allow Mr. Trump to remove her from the Fed, adding that she has not been charged or convicted of any crime.

“If there were a conviction for mortgage fraud, then we have this question of whether or not the statute would allow that as cause” for her firing, Mr. Menand said, noting that the law generally permits dismissal for wrongdoings related to professional misconduct.

Stay tuned. We’ll have more on this tomorrow.