Trump advocates for the resignation of a Federal governor, continuing his offensive streak
In a recent turn of events, President Trump has called for the resignation of Federal Reserve Governor Lisa Cook, who was appointed by President Joe Biden in 2022. The call comes amidst allegations of false statements on mortgage applications, as first reported by Bill Pulte, who oversees mortgage giants Fannie Mae and Freddie Mac.
Two months ago, Cook applied for mortgages on a house in Michigan and a condo in Georgia, stating each as her primary residence. However, two months after the Georgia condo application, the property was listed as a rental. Pulte, who has a history of raising similar claims against public figures such as Sen. Adam Schiff and New York Attorney General Letitia James, has questioned Cook's ability to manage interest rates if she allegedly lied to lower her own interest rates.
Pulte filed a letter in June 2021 to Attorney General Pam Bondi accusing Cook of making false statements on mortgage applications. He later posted the letter about the investigation on social media on Wednesday. Cook, however, has no intention of resigning due to pressure from President Trump. She has stated that she is gathering information to provide facts about her mortgage applications.
Meanwhile, the Fed has been at a standstill since December, after cutting interest rates by a full percentage point last year. Cook voted with a majority of her colleagues to hold interest rates steady last month. Two Trump appointees on the Fed's rate-setting committee, however, dissented from the vote, saying they were ready to resume cutting interest rates.
The move by President Trump is part of a high-pressure campaign to get the central bank to lower interest rates. Trump has been outspoken in insisting that borrowing costs should be lower. He has attacked Fed Chairman Jerome Powell and criticized the central bank for cost overruns in its headquarters renovation.
Inflation remains higher than the Fed's target of 2%, and some policymakers are worried that the president's tariffs could put more upward pressure on prices. It's unclear how Trump's tariffs are affecting this trend, but it's a concern that is being closely monitored by the Fed.
If Cook were to step down, it would create another opening for Trump to appoint a like-minded governor to the Fed's seven-member board. Trump has tapped White House economic adviser Stephen Miran to fill the seat vacated by Adriana Kugler's surprise resignation.
The Fed is designed to operate independently of the White House, but the ongoing pressure from the president highlights the political tensions surrounding monetary policy decisions. As the situation unfolds, it will be interesting to see how the Fed navigates these challenges and maintains its independence.
