Trump calls on Federal Reserve Governor Lisa Cook to resign after she was accused of mortgage fraud

President Trump called on Federal Reserve Governor Lisa Cook to resign on Wednesday after one of his administration’s officials alleged she had engaged in mortgage fraud and urged an investigation.

Bill Pulte, who Mr. Trump appointed as director of the U.S. Federal Housing Finance Agency in March, made the allegations on X, claiming Cook committed mortgage fraud after designating two homes as her primary residence. 

The housing regulator also shared an August 15 letter he sent to U.S. Attorney General Pam Bondi and Department of Justice official Ed Martin outlining the alleged mortgage fraud. The letter points to documents obtained by the agency, which Pulte claims show Cook falsified bank and property records to “obtain more favorable loan terms.” 

Pulte alleges Cook pledged in a June 2021 mortgage agreement to buy an Ann Arbor, Michigan, property that she would make the home her primary residence for at least one year, but then two weeks later purchased an Atlanta condominium, which she allegedly also agreed to make her primary residence for a year.

Mortgage rates for primary homes are typically lower than those offered by banks for secondary residences, such as vacation homes or investment properties, according to Rocket Mortgage.

In response to Pulte’s allegations, Mr. Trump wrote “Cook must resign, now!!!” on Truth Social Wednesday morning. The president has also told aides he is considering firing Cook, according to the Wall Street Journal, which cited a senior White House official and another person familiar with the matter.

Pulte also called on the Federal Reserve governor to resign, and said on X that he believes the Justice Department will open a criminal investigation into the alleged mortgage fraud.

The White House did not offer additional comment.

Cook says she won’t quit

Cook late Wednesday said she wouldn’t leave her post at the Fed. “I have no intention of being bullied to step down from my position because of some questions raised in a tweet,” she said in a statement issued by the Fed.

“I do intend to take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions and provide the facts,” she added. 

Mr. Trump’s call for her to resign comes as the president has been urging the Fed to cut interest rates, while deriding Chairman Jerome Powell over the Fed’s caution in lowering borrowing costs. Cook holds one of the seats on the 12-person Federal Open Market Committee, or FOMC, the group at the central bank that makes the decision on whether to cut, hold or raise interest rates based on a majority vote among its members.

Fed set to cut interest rates?

The president has also been pushing Congress to confirm the nomination of Stephen Miran to the Fed’s Board of Governors. Mr. Trump appointed Miran, one of his top economic advisers, to serve on the board on an interim basis earlier this month following the resignation of Gov. Adriana Kugler.

Removing Cook from her role and adding Miran “would not materially alter the composition of the FOMC,” noted Jaret Seiberg, an analyst with TD Securities, in a research note.

It’s also unlikely Miran could be confirmed before the Fed announces its next rate decision on Sept. 17 because the Senate doesn’t reconvene until Sept. 2, and a vote would require an “aggressive schedule” by the Senate banking committee, Seiberg added.

Wall Street expects Mr. Trump’s fervent wish for a rate cut to be granted soon, with economists pegging the probability at 88% that the Fed will lower rates on Sept. 17, according to financial data company FactSet.

In the meantime, Seiberg said he views it as unlikely that Cook will resign before the September Fed meeting. 

“For Cook, resigning will not end the legal probe. It is why we see no incentive for her to react to Pulte by departing before the next FOMC meeting,” he wrote. 

Cook joined the Fed’s Board of Governors in May 2022, according to her biography. Prior to her appointment, Cook was an economics professor at Michigan State University. She has also served on the faculty of Harvard University’s Kennedy School of Government and worked as a senior economist on the Council of Economic Advisers under President Obama.