President Trump has dropped a bombshell, vowing to oust Federal Reserve governor Lisa Cook if she refuses to step down amid swirling accusations of misconduct.
According to Axios, Trump's threat on Friday to fire Cook, coupled with the administration's push to build a criminal case against her, has intensified the clash between the White House and the central bank over monetary policy control.
Earlier this week, housing regulator Bill Pulte, director of the Federal Housing Finance Agency, fired the first salvo by posting a criminal referral online, urging the Justice Department to probe Cook for alleged mortgage fraud.
Pulte claims Cook secured a mortgage for a primary residence in Michigan, only to take out another mortgage for a primary home in Georgia mere weeks later. If true, this raises serious questions about transparency in financial dealings for a public official. Turns out, paperwork can come back to bite.
Adding fuel to the fire, Pulte also alleged that Cook listed a property in Atlanta as her personal residence after initially offering it for rent. Whether she actually rented the property remains murky, but the inconsistency is enough to raise eyebrows.
Trump, never one to shy away from a fight, quickly demanded Cook’s resignation after Pulte’s initial accusations surfaced. “What Cook did was bad,” Trump declared, signaling his impatience with perceived malfeasance at the Fed. Well, when the boss speaks, people tend to listen—or should.
On Friday, Trump upped the ante, bluntly stating, “I'll fire her if she doesn't resign.” That’s not just a warning; it’s a gauntlet thrown down in a battle for influence over the nation’s financial direction.
Cook, for her part, isn’t backing down, telling reporters at the Jackson Hole Fed conference, “I have no intention of being bullied.” That’s a gutsy stance, but standing up to a determined administration isn’t for the faint of heart.
Pulte didn’t stop with Cook, either, aiming at Federal Reserve chair Jerome Powell by accusing him of helping conceal Cook’s alleged actions in several social media posts. He even timed his latest jab just minutes before Powell’s speech at the Jackson Hole conference. Talk about knowing how to steal the spotlight.
This drama unfolds against a broader backdrop of Trump’s ongoing crusade to bend the Federal Reserve to his will, particularly on lowering interest rates. After Powell brushed off Trump’s demands to slash rates, whispers emerged that Trump nearly fired him over unrelated cost overruns on the Fed’s headquarters renovation.
Pulte, unsurprisingly, spearheaded that campaign against Powell as well, showing he’s not afraid to play hardball with the central bank’s leadership. The housing regulator has become a key ally in Trump’s push for dominance over monetary policy.
Currently, Trump holds sway over two of the seven seats on the Fed Board of Governors, with a third appointment awaiting Senate confirmation. If he manages to remove Cook and install a replacement before her term’s potential end, he could gain a majority on the board, potentially sidelining the 12 regional bank presidents. That’s a power play worth watching.
The Trump administration’s efforts to build a criminal case against Cook could create yet another vacancy at the Fed, further tilting the balance of power. For conservatives wary of unchecked central bank independence, this might seem like a long-overdue reckoning.
Yet, even as a supporter of Trump’s broader agenda to rein in progressive overreach, one must acknowledge the risk of politicizing an institution meant to stand above the partisan fray. Stability in financial markets matters, and heavy-handed moves could spook investors if not handled with care.
Still, when allegations of misconduct surface, accountability must follow, no matter how high the office. The clash between Trump and the Fed isn’t just about interest rates—it’s about who truly steers the economic ship. And in this showdown, it seems Trump is ready to take the wheel, come what may.
