In a move that stunned Washington and the financial world alike, President Donald Trump on Monday removed Federal Reserve Governor Lisa Cook from her position effective immediately. The decision came after explosive allegations surfaced accusing Cook of mortgage fraud and signing contradictory residency documents in two different states.
The announcement followed days of speculation. Trump had already called for Cook’s resignation on Truth Social after Federal Housing Finance Agency Director Bill Pulte said he would refer her case to the Department of Justice. By Monday night, the president made good on his warning, citing both dishonesty and negligence as grounds for dismissal under the Federal Reserve Act.
Trump’s letter left no room for ambiguity. He outlined how Cook allegedly swore one property in Michigan was her primary residence while, just two weeks later, claiming a Georgia property as her primary residence too. “It is inconceivable that you were not aware of your first commitment when making the second,” Trump wrote. “It is impossible that you intended to honor both.”
The president stressed the importance of trust in the Fed, saying that the American people deserve confidence in those setting the nation’s monetary policy. “The Federal Reserve has tremendous responsibility for setting interest rates and regulating reserve and member banks,” Trump wrote. “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.”
Cook, who was nominated to the Fed Board in 2022 by then-President Joe Biden, is not the only Democrat facing scrutiny. The DOJ is also investigating California Senator Adam Schiff for alleged mortgage fraud tied to questionable property filings. The timing of these cases has only heightened the sense that corruption is being uncovered at the highest levels of Democrat-aligned institutions.
The shake-up also adds new tension to Trump’s already testy relationship with Federal Reserve Chairman Jerome Powell. Trump has repeatedly called for Powell to slash interest rates to match his aggressive economic policies, while Powell has resisted, warning that Trump’s sweeping tariffs could create market uncertainty. Last month, Powell even told a panel that rates would have already been lowered if not for Trump’s tariff strategy.
But Powell himself is facing growing controversy. Republican Rep. Anna Paulina Luna has referred Powell to the DOJ over alleged perjury tied to the Fed’s $2 billion headquarters renovation project. That move followed calls from Pulte and others for a congressional investigation into Powell’s conduct. Though Powell’s term runs through May 2026, he has vowed not to step aside early.
For Trump, the removal of Cook was as much about restoring public trust as it was about enforcing accountability. He framed the decision as essential for the stability of America’s financial system. “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,” he told Cook in his letter.
With Cook out and Powell under increasing fire, the Federal Reserve is entering uncharted waters. Trump’s willingness to act decisively against officials he sees as compromised shows that his administration is not backing down from confronting corruption head-on. For Democrats and entrenched elites in Washington, the message is clear: Trump is prepared to use every tool at his disposal to root out misconduct—no matter how high up it goes.
