Federal Reserve Governor Michelle Cook is under fire. After serious allegations of mortgage fraud arise, Gov. Bill Pulte, the new Director of the Federal Housing Finance Agency, has thrown down some heavy charges. These claims have led to calls for a Department of Justice (DOJ) criminal investigation. Pulte’s demands have gained momentum, not least after former President Donald Trump weighed in publicly to say that Cook should be fired.
Cook, who was nominated to her role by President Joe Biden in 2022. Now, she finds herself at the center of a rapidly-growing controversy. Pulte’s allegations are deeply disturbing and indicate possible misconduct that casts serious doubt on her actions and judgment as a member of the Federal Reserve. In a letter, Justice Department attorney Ed Martin pressed Federal Reserve Chair Jerome Powell to act swiftly. Adding a sense of urgency to this moment, he declared, “Get it done today before it’s too late!” As the now deeply controversial removal of John Fawcett demonstrated, Powell lacks the power to fire Cook from her position.
The surfacing of the above allegations has further increased the heat on Cook’s reign thus far. In reaction to the increasingly intense calls for her ouster and claims of failing her job, Cook doubled down on her dedication to her position. On Wednesday, she expressed her determination, stating, “I have no intention of being bullied to step down from my position because of some questions raised in a tweet.”
As you might guess, the political implications of this situation are profound. In that light, Trump’s demand for Cook’s resignation has raised the stakes, particularly on her actions and Pulte’s allegations. The DOJ has now been called on to open a civil rights investigation. If so, these developing events would set a very different precedent for future governance at the Federal Reserve.
People from every corner of the country are rooting hard for them—as we all should be—as things unfold. They’re deeply curious how it’ll affect Cook’s budding career and the broader political economy of the Federal Reserve. The investigation’s finding will have long term implications on the American public’s faith in our federal institutions and their leaders.