The White House has revived its effort to remove Federal Reserve Governor Lisa Cook, sending her a letter dated August 5 that says President Donald Trump is considering firing her. Signed by Deputy Chief of Staff Dan Scavino, the letter gives Cook three weeks to respond to unproven allegations that she committed mortgage fraud.
The move renews a dispute over the independence of the United States central bank. Federal Reserve governors can be removed by the president only “for cause”, and Cook’s legal team says there is no valid cause for removing her.
At a glance:
- Cook is the first Black woman to serve as a Federal Reserve governor.
- The allegations concern claims that she listed homes in Georgia and Michigan as primary residences to obtain favourable mortgage rates.
- Trump first raised the claims in August 2025, and the Supreme Court blocked his attempt to fire Cook in June.
- The letter warns that the alleged crime could carry a prison sentence of up to 30 years, but the source says there is no conclusive evidence that Cook sought to deceive lenders.
What the White House letter says
The letter says the president is considering removing Cook from her position and characterises the alleged conduct as negligence that calls into question her trustworthiness as a Federal Reserve governor. It also warns that mortgage fraud is punishable by up to 30 years in prison.
Related coverage: Federal Reserve keeps rates steady amid renewed inflation pressure.
The source material does not establish that Cook committed fraud. The allegations centre on whether she identified two homes — one in Georgia and one in Michigan — as primary residences, which could have made her eligible for more favourable mortgage terms.
Why the dispute matters for the Fed
Federal Reserve governors serve full 14-year terms, and the law permits removal by the president only for cause. Those protections are intended to shield the central bank’s economic decisions from political pressure. No president since the Federal Reserve was founded in 1913 had sought to oust one of its governors before Trump’s effort against Cook.
Trump has campaigned for lower interest rates while inflation remains a concern. At an economic luncheon in Alaska on August 5, the same day as the letter, Cook said inflation was “too high” and indicated she was prepared to raise rates, a position shared by other Federal Reserve officials.
The earlier court ruling and next steps
Trump first unveiled the allegations against Cook in August 2025. In June, the US Supreme Court blocked his attempt to fire her, although the ruling cleared the way for him to remove the heads of other independent agencies.
Cook’s legal team said it would challenge what lawyer Abbe D Lowell called the latest pretext and work to preserve both Cook’s position and the Federal Reserve’s historic role. Cook must respond to the White House letter within the three-week deadline.
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