Trump Fires Fed Governor Accused of Mortgage Fraud

• Trump fires Fed Governor Lisa Cook
• Accusation of mortgage fraud
• Cook anticipates legal fight

U.S. President Donald Trump announced the immediate dismissal of Lisa Cook, Governor of the Federal Reserve (Fed), following an investigation into possible mortgage fraud.

The decision was communicated through a letter published on Truth Social.

In it, the president invoked Article II of the Constitution and the Federal Reserve Act of 1913 to justify the measure.

In the official document, Trump wrote: “You are hereby removed from your position on the Board of Governors of the Federal Reserve with immediate effect.”

Trump announces Lisa Cook’s dismissal from the Fed

The background

The dismissal comes after the president demanded Cook’s resignation last week, claiming that “she has done something wrong.”

The action is based on the recommendation of Bill Pulte, director of the Federal Housing Finance Agency, who requested that Attorney General Pam Bondi open a criminal investigation.

According to the presidential letter, there is sufficient evidence to believe that Cook “may have made false statements regarding one or more mortgage agreements.”

Specifically, Trump claims that the official signed two mortgages for a “primary residence” in two different states within just two weeks.

The legal framework

A U.S. president may dismiss a member of the Fed’s Board of Governors only for “cause,” which generally means misconduct or criminal behavior, not disagreements over monetary policy.

Experts anticipate that the decision will trigger a legal battle over whether Trump’s arguments meet the criteria established by current law.

The measure also comes amid rising tensions between the White House and the Fed, as Trump pressures the central bank to cut interest rates.

You may also be interested in: Trump suggests reinstating the name “Department of War” in the U.S.

Trump’s argument

In his letter, Trump stressed that the United States “must be able to fully trust the honesty of the members responsible for setting policy and overseeing the Federal Reserve.”

He added that Cook’s alleged “negligence” undermined her “competence” as a regulator.

Cook, originally appointed by former President Joe Biden, has been a constant target of the current Republican administration, which has also stepped up pressure on Fed Chair Jerome Powell.

Lisa Cook’s response

Who is Lisa D. Cook, the Fed governor fired by Trump? @CristinaDRojas explains pic.twitter.com/2XJ72Ip3DX

— expansioncom (@expansioncom) August 26, 2025

Hours after the announcement, Cook rejected the dismissal, arguing that Trump “has no authority” to fire her because “there is no legal cause under the law.”

The official said she would remain in her post and retained attorney Abbe Lowell, who described the event as a “firing by tweet” and said he would file a lawsuit against the measure.

In Cook’s words: “I will not resign. My commitment to the Federal Reserve and to the country remains intact. This attempt to remove me has no legal validity.”

Why it matters

This clash between Trump and Cook opens an unprecedented front in the relationship between the White House and the Fed.

It could also set a precedent for interpreting the concept of “cause” for removing members of the Board, at a time of heated debate over the independence of U.S. monetary policy.

The case is only beginning and is expected to quickly move from the political arena into the courts.

What is at stake is not only the future of Lisa Cook, but also the autonomy of the Federal Reserve in the face of presidential pressure.

Do you think this confrontation weakens the Fed’s independence or strengthens the president’s power over the institution?

SOURCE: EFE