August 26, 2025

In a shocking twist at the Federal Reserve, US President Donald Trump took the bold step on August 25, 2025, to fire Lisa Cook, the first African-American woman to serve as a Federal Reserve governor. The sudden dismissal comes amid serious allegations of mortgage borrowing improprieties. Trump had originally asked Ms. Cook to resign on August 20 after William Pulte, the Federal Housing Finance Agency director appointed by Trump himself, accused her of wrongly claiming two mortgages as primary residences. This is a big deal because loans for primary homes usually get lower interest rates. “I have determined that there is sufficient cause to remove you from your position,” Trump wrote in a letter posted on his Truth Social platform. He added that Ms. Cook had made false statements on mortgage paperwork and described her actions as "gross negligence in financial transactions" that question her ability to be a trustworthy financial regulator. But Ms. Cook wasn’t backing down. On August 20, she boldly said, “I have no intention of being bullied to step down from my position because of some questions raised in a tweet.” She stressed her wish to clear the air by providing accurate financial details. Ms. Cook was nominated to the Fed by former President Joe Biden in 2022. The contested mortgages were taken out in 2021, when she was an academic. Official 2024 financial disclosures listed three mortgages, with two marked as personal residences. Pulte insists Cook committed mortgage fraud, calling the proof "self-evident" and publicly available. Yet, no concrete evidence has been shown publicly. His claims come amid Trump’s wider campaign against diversity and inclusion efforts in government, which has pushed out several women and minorities. Trump’s firing of Ms. Cook also heats up his ongoing pressure on the Fed to cut interest rates sharply, despite officials keeping them steady due to inflation concerns. He has frequently threatened to fire Fed Chair Jerome Powell but lacks the legal power except “for cause.” This shake-up could quicken Trump’s reshaping of the Fed, with recent moves such as promoting Fed Governor Michelle Bowman to top bank regulator and considering Christopher Waller to replace Powell. Financial ethics have been a hot topic at the Fed before. In 2021, two regional Fed presidents resigned after trading scandals, prompting stricter ethics rules for Fed officials. The drama around Lisa Cook’s firing throws the Federal Reserve's future into the limelight. Will Trump’s shake-up bring bold change, or cause more chaos in the U.S. financial system? Time will tell!

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Tags: Federal reserve, Lisa cook, Donald trump, Mortgage fraud, Fed leadership, Financial ethics,