Trump Demands Resignation of Fed Governor Amid Allegations

President Donald Trump has intensified his campaign against the Federal Reserve by calling for the resignation of Governor Lisa Cook. This demand follows allegations of mortgage fraud made by Bill Pulte, director of the Federal Housing Finance Agency and a noted Trump supporter. In a letter dated August 15, 2023, Pulte urged the Justice Department to investigate Cook’s mortgage activities, which he claims involved falsifying documents to secure favorable loan terms.

In a post on his social media platform, Trump stated, “Cook must resign, now!!!” This public pressure reflects a broader strategy by the Trump administration targeting Federal Reserve officials who are not aligned with the president’s economic policies. Pulte has long criticized the Fed, particularly Chair Jerome Powell, for maintaining higher interest rates, which Trump insists should be lowered.

Pulte’s letter highlights two mortgages taken out by Cook in 2021. The first was for a property in Ann Arbor, Michigan, which Cook reportedly declared as her primary residence. Just two weeks later, she secured another mortgage in Georgia, also claiming that property as her primary home. Pulte alleges that Cook later listed the Georgia property as a rental, suggesting potential misconduct.

The Federal Reserve has yet to respond to requests for comment regarding the allegations. As pressure mounts on Cook, the Senate Banking Committee is expected to consider Trump’s nomination of Stephen Miran for a vacant board position. Miran currently heads the Council of Economic Advisers and his confirmation would further shift the board’s composition, which has seen Democratic appointees dwindle.

Analysts, including Jaret Seiberg from TD Cowen Washington Research Group, believe Cook’s resignation is unlikely to occur before the next Federal Reserve meeting. Seiberg noted, “For Cook, resigning will not end the legal probe,” suggesting that the ongoing scrutiny will continue regardless of her position.

If Cook were to resign, only two governors appointed by a Democratic president would remain on the board, following the recent departure of Adriana Kugler. Currently, Michael Barr and Philip Jefferson represent Democratic appointments, while Powell has served under presidents from both parties.

As these developments unfold, Fed policymakers are convening in Jackson Hole, Wyoming, for an annual economics symposium. This gathering plays a crucial role in shaping global monetary policy. Powell is anticipated to address the economic challenges facing the labor market in his keynote speech, with financial markets reflecting an approximately 83% likelihood of a rate cut at the Fed’s September meeting.

The ongoing tension between Trump and the Federal Reserve underscores the complex relationship between political leadership and central banking, especially as the nation grapples with economic uncertainties.