President Trump is pressing ahead in his effort to fire Federal Reserve Governor Lisa Cook, despite the emergence of documents calling into question his claim that Cook committed mortgage fraud and is therefore subject to removal.
Loan records reviewed by Reuters and others show that Cook identified a second home she purchased in Georgia in 2021, before she was appointed to the central bank, as a “vacation home.” Without providing evidence, William Pulte, director of the Federal Housing Finance Agency, previously accused Cook of identifying two houses — the one in Georgia and another in Michigan — as her primary residences, which could constitute fraud. Trump seized upon that accusation to claim that it gave him grounds to fire Cook and replace her with an ally, a move that critics say would violate long-standing rules prohibiting such political interference with the central bank.
Trump attempted to fire Cook via letter on August 25, saying the alleged mortgage fraud gave him cause to do so, but a judge ruled that Cook cannot be removed while her lawsuit challenging the firing is still in process. Trump has asked an appeals court to overturn the ruling, and on Sunday, the Justice Department repeated its request for a stay. If the request fails, Trump is expected to appeal to the Supreme Court immediately as he seeks a ruling ahead of the next Fed meeting, which begins Tuesday.
Cook pushes back: One of Cook’s lawyers, Abbe Lowell, said Sunday that the Trump administration’s allegations are a “smear campaign” being waged to give the president more control over the central bank.
“The government continues to ignore the facts that have been publicly reported on and cited in our briefs that refute their allegations against Governor Cook,” Lowell said, per Bloomberg. “The attempt to remove Governor Cook is based on cherry-picked social media posts from the FHFA Director that collapse under basic scrutiny.”
In its filing, the Justice Department challenged Cook’s claim that the president cannot fire a Fed official for alleged or proven misconduct that occurred before the official took office. While Fed officials are protected from removal, the president has the authority to remove officials “for cause” — an authority that has never been exercised or tested before — and Trump is claiming that his removal authority is not limited to the period of time officials are in office.
More boldly, the Trump administration is arguing that the president’s assertion that he is firing an official for cause is not reviewable by the courts. As the Justice Department filing puts it, “The president’s ‘cause’ determination is not subject to judicial second-guessing.”
The case raises major questions about the limits on executive authority and the nature of the relationship between the president and the central bank, and some legal observers expect the Supreme Court to address the case quickly.
Trump ally nears approval: However the Cook case is decided, Trump will have at least one new ally at the Fed when the central bank starts its two-day meeting tomorrow. Later today, the Senate is expected to approve Stephen Miran, who currently chairs the White House Council of Economic Advisers, to fill a vacant seat on the seven-member Federal Reserve Board.
Miran has said he will take a leave of absence from his current job while filling in at the Fed but will return to his White House post when his term expires at the end of January 2026. It will be the first time a White House official has had a direct role in setting monetary policy in 90 years.