For more than a year, President Donald Trump has sought to push out members of the Federal Reserve Board of Governors and gain more leverage over the central bank’s policies. In early October, the White House resumed that effort, announcing the formation of a committee to investigate mortgage fraud allegations against board member Lisa Cook. She will be required to appear at a White House hearing on Nov. 5 to defend herself, Trump said in a memo.
The new campaign against Cook comes after the Supreme Court blocked Trump’s initial attempt to oust her over the fraud allegations, which Cook claims are part of a bogus effort to legally justify pushing her out of the job. It also comes days after Trump renewed his attacks against former Fed Chair Jerome Powell, who remains on the board of governors after his term leading the central bank ended in May.
Trump’s efforts have renewed the question of how much a US president can and should influence an institution designed to be independent.
What’s Trump’s latest attempt to oust Cook?
In a memo , Trump said the White House committee would investigate whether there is “cause” for Cook’s removal following a Supreme Court decision in June that allowed her to remain in her role while she fights an earlier attempt to fire her.
Cook, who has served as a Fed governor since 2022, hasn’t been charged with a crime and she has denied allegations that she committed mortgage fraud by falsely labeling a secondary home as her primary residence to get better loan terms. Her attorney has said they will challenge any attempt to fire her.
Cook’s position had appeared safe for the time being because the Supreme Court found that Trump had failed to provide her with the opportunity to respond to accusations of wrongdoing. But the court left open the possibility that Trump could try again to fire Cook as long as he provided her with a chance to defend herself first.
Attorneys for Cook said they had “grave doubts that this ‘hearing’ is a legitimate one that would conform to the law.”
What are the roots of the Cook case?
The legal drama began on Aug. 25, 2025, when Trump announced on social media that he had fired Cook following a claim by a top administration official that she may have engaged in so-called mortgage occupancy fraud by falsely labeling a secondary home as her primary residence to get better loan terms. Cook has denied the accusations and alleged that the claims against her were whipped up as a bogus reason to remove her. Cook’s attorney Abbe Lowell called the allegations “unfounded and untrue.”
Cook disputed that there was any evidence she intentionally provided false information or meant to deceive financial institutions. Her lawyer argues that she had signed a “primary” mortgage agreement for a property in Atlanta due to “an entirely inadvertent oversight” and made other disclosures indicating that it was a vacation home.
Can Trump fire Fed governors?
Section 10 of the Federal Reserve Act says members of the Fed’s board of governors can be “removed for cause by the president.” Courts have interpreted “cause” to mean inefficiency, neglect of duty or malfeasance in office. Trump’s clash with Cook has tested the application of that provision.
In a 5-4 decision , the Supreme Court in June refused to let the president immediately fire Cook, finding that he failed to provide her with enough advance notice and an opportunity to respond to accusations of wrongdoing. The justices in the majority reinforced that Fed governors should be protected against political interference by only allowing the president to remove them “for cause,” as opposed to any reason, known as “at will” removal.
The high court didn’t provide a detailed rubric for what might qualify as “cause,” however, leaving open the possibility that Trump could try again to fire Cook as long as he provided her with a chance to defend herself first.
Trump now says that the committee being set up would investigate whether there is “cause” for Cook’s removal in light of the high court’s decision.
Cook has argued that her alleged misconduct took place a year before her appointment and had nothing to do with her duties as Fed governor, and argued it therefore doesn’t meet that standard. The Supreme Court hasn’t ruled on whether the allegations against Cook, if true, would be sufficient grounds for removing her.
Why is the case so important?
Trump’s campaign to pressure the Fed, which has included repeated threats to fire Powell, has tested the bank’s independence, which is widely seen by economists as ensuring that US monetary policy prioritizes long-term economic stability over short-term political gains.
In protecting Fed governors from being fired arbitrarily by the president, the Supreme Court reinforced the central bank’s decision-making autonomy. Chief Justice John Roberts, who wrote the June opinion, pointed to what he said was a long tradition of keeping the Fed’s exercise of monetary policy free from White House intervention, saying Congress “limited the president’s power to remove governors for good reason.”
“We see no reason to leave the public in limbo, or to sow doubt as to the status of one of our nation’s [and the world’s] most important financial institutions,” Roberts wrote.
Could Trump still succeed in firing Lisa Cook?
The short answer is yes.
The Supreme Court faulted Trump for not giving Cook notice of the claims against her and a chance to be heard before trying to remove her. The justices stopped short of saying whether the allegations against her, if true, would be sufficient grounds for removing her in the midst of her 14-year term.
Roberts, in his opinion, envisioned that the case could be replaced by a new fight if Trump started a fresh process to fire Cook. He said the justices were ruling “on narrow grounds” and left open the possibility of Trump “trying again, if he chooses to do so,” to fire Cook. In such a case, Roberts noted, Cook could again appeal to the courts.
What does ‘for cause’ mean in employment disputes?
The justices declined to provide a clear rubric for understanding the meaning of “for cause.” Instead, they said the positions put forward by Cook and the Trump administration were unacceptable extremes at either end of a spectrum.
Roberts wrote that the administration’s position that cause could be “any concern” about a governor’s “conduct, ability, fitness, or competence,” as long as it was more than just a “policy disagreement,” was “too lenient.” But Cook’s view that cause could only mean misconduct while in office or being ineligible to serve was “too stringent,” Roberts wrote.
What is Cook accused of doing? What’s her response?
The accusations against Cook were first made by Federal Housing Finance Agency Director Bill Pulte, a staunch Trump ally. He alleged in a social media post that Cook took a mortgage on a property in Ann Arbor, Michigan, stipulating that it would be her primary residence, and then two weeks later declared the same for another mortgage on a Georgia property.
Lowell has said his client didn’t commit fraud. A lawsuit Cook filed in the case suggests that any alleged discrepancies could have been the result of clerical errors and do not constitute the kind of wrongdoing that would justify dismissal “for cause,” as the law requires.
What authority does the president have over the Fed?
The president’s clearest power over the Fed is through filling vacancies on the board of governors and in placing some of those appointees in leadership positions, including the chair, on that body.
Is the Fed vulnerable to pressure?
The Fed in theory is designed to be apolitical and consider only what’s best for the economy as it sets interest-rate policy.
Yet the Fed is widely understood to operate in a political context. Fed leaders work closely with the Treasury Department, especially during times of crisis, and spend time networking with Capitol Hill lawmakers. The Fed’s decisions have to take into account the economic impact of decisions by both the president and Congress, such as tax cuts or large spending plans.
Why do central banks want independence?
The argument for independence is that the economy will benefit more in the long run if investors and consumers believe that the central bank will do whatever is needed without fear of political consequences. Economic research shows that central banks with autonomy from government have a greater track record in controlling inflation.
Advocates of independent central banks say freedom from political pressure is what lets banks take necessary but sometimes unpopular steps, such as raising interest rates to fight inflation. In general, politicians like lower interest rates because making money cheaper helps people buy more things right now, boosting economic growth.