Friday Aug 22 2025 15:20
2 min
Former President Donald Trump has threatened to fire Lisa Cook, a member of the Federal Reserve Board of Governors, if she does not resign voluntarily. This threat represents a new escalation in Trump's efforts to pressure the US central bank, which he has repeatedly criticized for its interest rate decisions.
Trump's remarks came in response to a question about Cook's situation, who was appointed by President Joe Biden. Trump alleges that Cook has committed "atrocious" acts, referring to allegations of mortgage-related fraud.
The allegations relate to claims that Cook provided misleading information regarding her primary residence when applying for mortgage loans. Bill Pulte, head of the Federal Housing Finance Agency, has referred the matter to the Department of Justice for investigation.
The Federal Reserve Act stipulates that members of the Board of Governors can be removed "for cause." However, the US Supreme Court has ruled that the president cannot remove board members without just cause. This means that Trump would need to prove that Cook committed serious misconduct to justify her removal.
If Trump succeeds in firing Cook, he would be able to appoint a replacement, which could change the balance on the Federal Reserve Board. Currently, there is another vacancy on the board, and if Trump can fill both seats, he may be able to tilt the board towards monetary policies more in line with his views. It is worth noting that the terms of members of the Federal Reserve Board last for 14 years, making these appointments have a long-lasting impact.
Lisa Cook has refused to resign under pressure and has stated that she will continue to serve the country faithfully. Some have also criticized Trump's attempts to interfere with the independence of the Federal Reserve, warning that this could undermine the central bank's credibility.
The threat to fire Lisa Cook represents a new chapter in the conflict between Trump and the Federal Reserve. If Trump succeeds in his efforts, this could lead to significant changes in US monetary policy and shape the future of the economy. Understanding the complexities of the Federal Reserve's structure and mandate provides valuable context when interpreting these events. The Fed plays a critical role in maintaining economic stability, and political interference can have far-reaching consequences.
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