In a surprising development, US President Donald Trump announced on Monday that he would remove Lisa Cook from her position as a governor on the Federal Reserve’s board of directors. Since her 2022 appointment, Cook had the distinction of being the first African American woman to serve in the role. Now, she is under the microscope as the target of a major mortgage fraud scandal.
The news came just as Trump escalated his campaign against the Federal Reserve. He particularly targeted his criticisms toward its chair, Jerome Powell. In particular, he has complained about the Fed’s monetary policy, including its hesitance to cut interest rates. Just the other day, he suggested that he might fire Powell after all. This is yet another indication of his thirst for a change in the Fed’s direction.
Cook’s ouster comes in response to troubling allegations. Attempts to intimidate her included when the head of the Housing Finance Agency accused her of committing mortgage fraud. Whether based on misunderstanding, misinformation or malice, these claims have led to a public debate over Cook’s integrity and fitness to serve on the board.
In spite of the charges, Cook has continued to hold her ground hard. In a statement released last week, she said she will not be bullied into resigning.
“I have no intention of being bullied to step down from my position because of some questions raised in a tweet.” – Lisa Cook
Unsurprisingly, the fallout from Trump’s announcement has been swift. While neither he nor the Federal Reserve has provided explicit reasons for Cook’s removal, Trump did comment on the situation, stating, “It is inconceivable that you were not aware of your first commitment when making the second.” This comment illustrates a common conflict of interest regarding the property. Cook has just established it as her primary residence in Michigan for the next year.
Cook has used her time at the Federal Reserve to address economic inequities. She works tirelessly advocating for economic policies that lift all people up equitably. She has been very public about her desire to collect the right information to answer any honest questions about her actions in the first place.
“I am gathering the accurate information to answer any legitimate questions and provide the facts.” – Lisa Cook
The impact of this news goes well beyond Cook herself. Observers note that Trump’s decision to target Cook may reflect broader efforts to reshape the Federal Reserve’s leadership in accordance with his economic vision. The combination of political pressure and allegations of misconduct highlights the contentious relationship between the Trump administration and the central bank.
Cook is currently preparing to appeal her dismissal. She is in the process of trying to sue Trump, arguing her ouster from the post was illegal. Her position as a trailblazer in the Federal Reserve might make this discussion go a little differently. Diversity advocates say her departure is a huge loss for diversity at the highest levels of financial institutions.