Trump advocates for the resignation of a Federal Reserve governor, while a confidant suggests an investigation by the Department of Justice.
In the heart of political drama, Federal Reserve Governor Lisa Cook finds herself embroiled in a mortgage fraud scandal, with allegations stemming from Federal Housing Finance Agency (FHFA) Director Bill Pulte. The claims suggest that Cook inaccurately declared two properties in Michigan and Georgia as her primary residence on mortgage loan applications, potentially falsifying bank documents and property records to secure better loan terms[1].
The fallout from this controversy has reached the highest echelons of power, with former President Donald Trump calling for Cook's resignation, citing "sufficient reason" to believe she made false statements on mortgage agreements[1]. This move comes as Trump plans to reshape the Federal Reserve, a move that could have far-reaching implications for the central bank's management[2].
The allegations against Cook have sparked concerns about the Fed's independence, with figures like former Treasury Secretary Larry Summers expressing apprehension about the potential for political pressures to influence the Fed's decision-making process[1]. Critics warn that such actions could erode the Federal Reserve's autonomy by forcing it to align with political interests[1].
As of late August 2025, no official investigations or formal actions such as removal or resignation have been announced regarding Cook's position[1][2]. The controversy has, however, been a topic of public discourse, with a CEO questioning Cook about the issue on August 27, 2025[2].
Meanwhile, FHFA Director Bill Pulte has sent a referral to the Department of Justice regarding the mortgage fraud allegations against Cook[3]. Pulte accused Cook of falsely claiming primary residence status for homes in Ann Arbor, Michigan, and Atlanta, Georgia, when obtaining mortgages on them[3].
The mortgage fraud allegations against Cook are not the only political storm brewing at the Federal Reserve. Trump has frequently threatened to fire Fed Chair Jerome Powell[4]. Despite these threats, Powell has signaled his intention to serve out the remainder of his term as chairman[5]. Reports have also emerged suggesting that Powell is considering resigning, although these have not been confirmed[6].
Powell is scheduled to deliver a highly-anticipated speech on Friday morning that could provide insights into how the central bank views the latest economic data and the path for potential interest rate cuts[7]. The speech, traditionally a key event in the financial calendar, will be closely watched in light of the current political climate.
Sources:
- Reuters
- CNBC
- Bloomberg
- CNN Business
- The Wall Street Journal
- Politico
- MarketWatch
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