Tuesday, August 26, 2025

Trump Announces Firing of Fed Guv., but Legal Battle is Just Beginning

'In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity...'

(Headline USAPresident Donald Trump pledged on Friday to fire Lisa Cook, the embattled governor of the Federal Reserve, if she does not resign. Now, he’s following through on that promise.

Trump said in a letter posted on his Truth Social platform that he is removing Cook effective immediately because of allegations that she committed mortgage fraud.

“The American people must have the full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve,” Trump wrote in a letter addressed to Cook, a copy of which he posted online. “In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity.”

Trump argued that firing Cook was constitutional. “I have determined that faithfully enacting the law requires your immediate removal from office,” the president wrote.

Bill Pulte, a Trump appointee to the agency that regulates mortgage giants Fannie Mae and Freddie Mac, made the accusations last week. Pulte alleged that Cook had claimed two primary residences — in Ann Arbor, Michigan, and Atlanta — in 2021 to get better mortgage terms.

Trump’s move is likely to touch off an extensive legal battle that will probably go to the Supreme Court and could disrupt financial markets. Stock futures declined slightly late Monday, as did the dollar against other major currencies.

Responding to the scandal, Cook said Monday night that she would not step down. “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” she said in an emailed statement. “I will not resign.”

Cook will have to fight the legal battle herself, as the injured party, rather than the Fed.

Adapted from reporting by the Associated Press

 

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