Trump fires Federal Reserve Bank boss Lisa Cook, increasing pressure for rate cut

US President Donald Trump has fired Federal Reserve (Fed) Director Lisa Cook, according to a letter published Monday night, 25. The decision takes immediate effect at the institution equivalent to the American Central Bank, according to the measure published in a record on Truth Social.

Lisa Cook, appointed by Trump's predecessor, Democrat Joe Biden , is the first Black woman to become a Fed governor, after being elected in January 2022 to be the governor of the Federal Reserve Bank of Chicago, having been confirmed by the Senate on May 10 and taking office on May 23 of that year.

Cook came under Trump's radar after Federal Housing Finance Agency (FHFA) Chairman William Pulte accused her of mortgage fraud. On Wednesday, the 20th, Trump said he intended to urge Lisa Cook to resign.

In justifying his dismissal, Trump said he had "no confidence in Cook's integrity."

The US president cited that his decision took into account Article 2 of the US Constitution and the Federal Reserve Act of 1913, according to a document published in Truth Social.

The Federal Reserve Act allows for termination for cause, Trump said in a document. "I have determined that there is sufficient cause to remove her from her position."

The Republican refers to the accusation made by the chairman of the board of the US Federal Housing Finance Agency (FHFA), William Pulte, listing that Cook had made false statements in one or more mortgage agreements.

As an example, Trump cited Cook's alleged signing of a document certifying that a property in Michigan would be her primary residence for the following year. Two weeks later, Cook allegedly signed another document certifying that a property in Georgia would be her primary residence for the following year, the letter states. "It is inconceivable that you were not aware of your first commitment when you made the second," Trump said.

"The Federal Reserve has an enormous responsibility in setting interest rates and regulating reserves and member banks. The American people must have full confidence in the honesty of the members who set policy and oversee the Federal Reserve," said the US president.

"In light of their deceptive and potentially criminal conduct of a financial matter, they cannot and I have no confidence in their integrity," Trump said.

Federal Housing Finance Agency Chairman William Pulte thanked Trump in a message on the X network:

"Thank you, President Trump, for your commitment to fighting mortgage fraud and enforcing the law. If you commit mortgage fraud in the United States, we will come after you, no matter who you are."

The change of target

The market was already accustomed to the US president's aggressive tone toward Fed Chairman Jerome Powell . Adjectives like "too late," "too political," and "slow" appear almost daily in Trump's speeches and on social media when referring to Powell, amid pressure to lower interest rates in the world's largest economy.

After a market panic over rumors that the Republican would break a global consensus on independence and that a Fed chairman would be fired for the first time, Trump softened his tone, considering that Powell could serve out his term until the end of May 2026, but made it clear that the central bank chief should resign.

The target then moved to a seat lower in the Fed hierarchy, Lisa Cook. The attack was the first against a serving member of the Federal Open Market Committee (FOMC) in a position outside the chairmanship. In the most recent FOMC meetings, Cook followed Powell's lead and voted to keep interest rates unchanged. Her potential departure would pave the way for a new nomination—certainly with a more dovish (interest rate cut) stance—by the US president to the board of the US central bank.

In his efforts to have a composition at the table that decides interest rates more aligned with his interests, Trump had already achieved a victory in early August, with the resignation of director Adriana Kugler , on the 1st.

On January 7, Trump confirmed the selection of the current chairman of the Council of Economic Advisers (CEA), Stephen Miran , to fill the position held by Adriana Kugler until January 31, the position held since September 13, 2023. In her letter, she said she would resume her academic career at Georgetown University. Miran, chosen by the US president to succeed her, is an outspoken critic of Powell's monetary policy management.