Trump Fires Fed Governor Cook Over Mortgage Allegations

President Donald Trump on Monday evening fired Biden-appointed Federal Reserve Governor Lisa Cook following allegations of mortgage fraud.

“Pursuant to my authority under Article II of the Constitution of the United States and the Federal Reserve Act of 1913, as amended, you are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately,” Trump wrote in a letter to Cook.

“I have determined that there is sufficient cause to remove you from your position,” the president added, citing a criminal referral filed by Federal Housing Finance Agency Director Bill Pulte.

Details of the Allegations

According to the referral, Cook falsely claimed two different properties as her “primary residence” in order to secure more favorable mortgage terms.

On June 18, 2021, Cook obtained a mortgage for a property in Ann Arbor, Michigan, affirming that it would be her principal residence within 60 days of the loan agreement.

Just two weeks later, on July 2, 2021, she purchased a condominium in Atlanta, Georgia, and entered into a 30-year mortgage agreement stating that the condo would also serve as her primary residence for at least one year.

Public records indicate the Atlanta property was listed for rent in September 2022. However, Pulte’s referral states that Cook’s federal financial disclosures for 2022 and 2023 did not include any rental income connected to the condo.

Pulte argued that these representations could amount to occupancy fraud, since mortgage borrowers are generally prohibited from designating multiple properties as their primary residence at the same time.

Market Reaction

Trump’s unprecedented move sparked immediate debate in financial and legal circles.

The U.S. dollar softened across the board after the news, while short-end U.S. Treasury yields fell in Asian hours on Tuesday amid wagers that Cook’s replacement would be a dovish pick who might push for further rate cuts.