NEW YORK (AP) — In an unprecedented move, U.S. President Donald Trump said that he’s firing Federal Reserve Governor Lisa Cook — marking a sharp escalation in his efforts to exert greater control on one of the most powerful financial institutions in the world.
Trump took to social media Monday night to announce that he would be removing Cook, effective immediately, over allegations that she committed mortgage fraud before she joined the board. In response, Cook said that she would not step down — and maintained that the president has no authority to fire her.
“I will continue to carry out my duties to help the American economy as I have been doing since 2022,” she said in an emailed statement. An attorney for Cook later said that she would be suing to challenge Trump’s action.
Cook made headlines three years ago when she became the first Black woman to serve on the Fed’s board of governors, which votes on the central bank’s key interest rate decisions. Prior to her appointment to the board, she was a longtime economics professor and also held roles in the Clinton, G.W. Bush and Obama administrations.
Here’s what to know about Lisa Cook.
How long has Cook served as a Fed Governor?
Cook was appointed to the Fed’s board by President Joe Biden in 2022. Her nomination was opposed by most Senate Republicans, and she was approved on a 50-50 vote with the tie broken by then-Vice President Kamala Harris.
When she took office, Cook became the first Black woman to serve as a Fed Governor in the institution’s over century-long history. She initially filled an unexpired term and was reappointed the following year. Her appointment runs through January 2038.
What did Cook do prior to her role at the Fed?
Cook has taught economics and international relations at Michigan State University, and was previously also on the faculty of Harvard University’s Kennedy School of Government.
She has received degrees from Oxford University, Spelman College and the University of California, Berkeley. Some of her most well-known research has focused on the impact of racial violence on African-American innovation, and consequently wider economic growth.
Also prior to her appointment to the Fed, Cook served as a senior economist on the Council of Economic Advisers under President Barack Obama from 2011 and 2012 — as well as a senior adviser on finance and development in the Treasury Department’s Office of International Affairs from 2000 to 2001, under Presidents Bill Clinton and George W. Bush.
What does a Fed Governor do?
Fed governors vote on the central bank’s interest rate decisions — as well as other issues of financial regulation.
Board members are appointed by the president and confirmed by the Senate. But unlike cabinet secretaries — who serve at the pleasure of the president, for example — Fed governors take on 14-year terms that are staggered in an effort to insulate the Fed from political influence.
The political independence of the Fed is considered critical to its ability to fight inflation because it enables the central bank to take unpopular steps, like raising interest rates. If bond investors start to lose faith that the Fed will be able to control inflation, they will demand higher rates to own bonds — pushing up borrowing costs for the U.S. government as well as consumers’ mortgages, car loans and business loans.
What is the Trump administration accusing Cook of?
The Trump administration has accused Cook of mortgage fraud. Bill Pulte, a Trump appointee who heads the Federal Housing Finance Agency, made the accusations last week — alleging that Cook had claimed two primary residences, in Ann Arbor, Michigan, and Atlanta, in 2021 to get better mortgage terms. Mortgage rates are often higher on second homes or those purchased to rent.
In a letter addressed to Cook that Trump shared on Truth Social Monday night, the president said that the “American people must have the full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve” — and that he did not have confidence in Cook’s integrity in light of her “deceitful and potentially criminal conduct.”
The law allows a president to fire a Fed governor “for cause,” which typically means for some kind of wrongdoing or dereliction of duty. But establishing a for-cause removal usually requires some type of proceeding that would allow Cook to answer the charges and present evidence, which hasn’t happened in this case.
Cook’s lawyer, Abbe Lowell, said on Tuesday that she would be filing a lawsuit to challenge Trump’s action — maintaining that his attempt to fire Cook “lacks any factual or legal basis.”
While presidents have clashed with Fed chairs before, no president has ever sought to fire a Fed governor before. And critics say these accusations are being used as a tool by Trump to gain control of the central bank. Forcing Cook off the Fed’s governing board would provide Trump an opportunity to appoint a loyalist.
Have any other government officials been accused of mortgage fraud?
Yes. Pulte, whose agency regulates mortgage financiers Fannie Mae and Freddie Mac, has targeted several government officials with mortgage fraud claims in recent weeks.
“If you commit mortgage fraud in America, we will come after you, no matter who you are,” Pulte wrote on social media platform X following Trump’s action against Cook.
Still, this isn’t the first time Pulte has raised allegations against individuals who have clashed with Trump. He and Trump have simiarly targeted Sen. Adam Schiff, D-Calif., and New York Attorney General Letitia James. Schiff led Trump’s first impeachment, while James sued Trump’s company over alleged fraud for falsifying records.
Meanwhile, Trump’s administration has faced criticism for not targeting others accused of mortgage fraud — including Texas Attorney General Ken Paxton, a staunch Trump ally. An AP review of public records earlier this year found that mortgages for three houses signed by Paxton and wife, Angela, contained inaccurate statements declaring that each home was their primary residence — enabling the now-estranged couple to improperly lock in low interest rates. But Pulte and the Trump administration have yet to publicly share any plans to investigate.
