President Donald Trump said Friday he will fire Federal Reserve Governor Lisa Cook if she does not resign, escalating a high-stakes confrontation with the central bank as his administration sharpens scrutiny of Biden-era appointees.
“What she did was bad,” Trump told reporters during a surprise visit to The People’s House, a White House museum. Asked about Cook, the president was blunt: “So I’ll fire her if she doesn’t resign,” CNBC reported.
Cook, a former Biden pick, has come under fire after Federal Housing Finance Agency Director Bill Pulte accused her of mortgage fraud. Pulte claimed Cook improperly declared two different homes as her primary residence at the same time. He sent a criminal referral to the Department of Justice, which confirmed Thursday it would investigate.
Cook denied wrongdoing this week, saying she had “no intention of being bullied to step down” over accusations she called misleading. “I learned from the media that FHFA Director William Pulte posted on social media that he was making a criminal referral based on a mortgage application from four years ago, before I joined the Federal Reserve,” she said in a statement. She added that she is gathering records to answer “any legitimate questions and provide the facts.”
Pulte, a Trump ally and outspoken critic of Fed Chairman Jerome Powell, has amplified his claims on social media. He has also pressed for faster interest-rate cuts in line with Trump’s calls for looser monetary policy.
If Trump successfully removes Cook “for cause,” it would give him another opening to reshape the Federal Reserve’s seven-member governing board. Two sitting governors, Christopher Waller and Michelle Bowman, are already Trump appointees and dissented from the Fed’s most recent decision to hold interest rates steady. Another seat opened earlier this summer when Adriana Kugler stepped down.
Board members serve staggered 14-year terms, which means Trump could lock in a majority for years if he fills multiple vacancies. The president’s ability to remove a sitting governor is limited by law and must meet the “for cause” threshold, but Trump’s remarks indicate he intends to test those boundaries.
Trump has repeatedly demanded Cook’s resignation, while allies in his administration have pressed Powell to intervene. Ed Martin, a Justice Department lawyer seen as close to Trump, urged Powell to remove Cook immediately — though the central bank chair does not have that authority.
Democrats say the president’s attacks are politically motivated. “Trump is targeting Cook because he is trying to find a scapegoat for his failure to lower costs for Americans,” Sen. Elizabeth Warren, D-Mass., the top Democrat on the Senate Banking Committee, wrote on X.
Cook has consistently sided with Powell and the Fed’s majority in recent policy votes, including last month’s decision to keep rates unchanged. She has also aligned with Powell’s cautious approach of balancing inflation risks with signs of slowing growth.
Trump’s comments came on the same day Powell acknowledged that “economic conditions may warrant” interest-rate cuts in the months ahead. Powell said the economy and labor market remain resilient but warned that Trump’s new round of tariffs is raising inflation pressures even as growth cools.
Investors seized on Powell’s remarks as a sign the Fed is inching toward an eventual rate cut. U.S. stocks surged to record highs Friday, with the Dow Jones Industrial Average closing above 45,600 for the first time ever.
Still, the political battle surrounding Cook highlighted the widening clash between the Trump White House and the traditionally independent Federal Reserve. For Trump, removing Cook would cement greater control over the institution that guides U.S. monetary policy. For Democrats, the fight reflects a broader attempt to politicize the Fed at a sensitive moment for the economy.
Whether Cook resigns, is forced out, or withstands the pressure, the standoff ensures the Federal Reserve will remain at the center of both Washington politics and Wall Street attention in the weeks ahead.