Allianz chief economic advisor Mohamed El-Erian discusses Jerome Powell’s speech at Jackson Hole and why he believes there needs to be change at the Federal Reserve on ‘Kudlow.’
President Donald Trump ousted Federal Reserve Governor Lisa Cook on Monday, alleging she lied on mortgage forms by declaring two primary residences.
In a letter to Cook, Trump said the Federal Reserve Act provides that she can be removed at his discretion.
“As set forth in the Criminal Referral dated August 15, 2025, from Mr. William J. Pulte, Director of the Federal Housing Finance Agency, to Ms. Pamela Bondi, Attorney General of the United States…there is sufficient reason to believe you may have made false statements on one or more mortgage agreements,” Trump wrote. “For example, as detailed in the Criminal Referral, you signed one document attesting that a property in Michigan would be your primary residence for the next year.
“Two weeks later, you signed another document for a property in Georgia stating that it would be your primary residence for the next year,” Trump continued. “It is inconceivable that you were not aware of your first commitment when making the second. It is impossible that you intended to honor both.”
TRUMP CALLS FOR FED GOVERNOR’S RESIGNATION AS ALLY REQUESTS DOJ PROBE
President Donald Trump announced the removal of Federal Reserve Governor Lisa Cook in a letter dated Aug. 25, 2025. (Al Drago/Bloomberg via Getty Images / Getty Images)
Trump wrote that the Federal Reserve has a “tremendous responsibility” to set interest rates and regulate banks.
He added that Americans must have full confidence in the honesty of those setting policy and overseeing the Federal Reserve.
“In light of your deceitful and potentially criminal conduct in a financial matter, they cannot, and I do not have such confidence in your integrity,” Trump wrote. “At a minimum, the conduct at issue exhibits the sort of gross negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator.”
He concluded ordering her immediate removal from office.
FOX Business has reached out to the Federal Reserve for comment regarding Cook’s removal.
Trump threatened to remove Cook from her role on Friday as she faces mortgage fraud allegations that are under investigation by the Department of Justice (DOJ). The investigation was sparked by a criminal referral filed by Pulte, a staunch ally of Trump’s and a critic of the Federal Reserve.
“I’ll fire her if she doesn’t resign,” Trump told reporters on Friday. “What she did was bad.”
Pulte sent his referral to the DOJ on Wednesday and accused her of having “falsified bank documents and property records to acquire more favorable loan terms, potentially committing mortgage fraud under the criminal statute.”
Under federal law governing the Federal Reserve system, the president can only remove a sitting governor for cause, which has historically been interpreted as applying to malfeasance or misconduct, rather than policy disagreements.
The president’s action to remove Cook from her role marks the first time in history that a president has attempted to remove a sitting Federal Reserve governor, and it could lead to a legal battle.
The president and his allies have repeatedly urged the Fed to cut interest rates in an effort to boost the economy and lower the cost of servicing the more than $37 trillion U.S. national debt, though Trump has backed off past threats to fire Fed Chair Jerome Powell.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Cook was appointed to the Fed by President Joe Biden in 2022 and was confirmed by the Senate on a party-line vote of 51-47 in September 2023. Her term as a Fed governor runs 14 years, from 2024 to 2038.
FOX Business’ Eric Revell contributed to this report.
