Trump fires Fed Governor Lisa Cook: Political earthquake looms!

Trump fires Fed Governor Lisa Cook: Political earthquake looms!

On August 26, 2025, there is significant unrest in US economic policy. US President Donald Trump has announced the immediate dismissal of Lisa Cook, Governor of the Federal Reserve (Fed). This comes amid serious allegations against Cook, stemming from alleged misrepresentations in mortgage agreements and gross negligence in financial dealings. The president announced the firing via his Truth Social platform, marking an unprecedented move: the first time a president has fired a Fed member in U.S. history.

The decision has sparked strong reactions and raises fundamental questions about the central bank's independence. Economists warn that Trump's actions could negatively impact the international financial system. Rudi Bachmann, professor of economics at the University of Michigan, expresses concerns about the legal consequences for Trump. The Fed's independence means that the president cannot fire governors without extensive reasons.

Reaction from Lisa Cook

Lisa Cook has made it clear that she will not resign and sees no legal basis for her dismissal. This could potentially lead to litigation. Cook, who has served on the Fed's Board of Governors since May 2022 and is the first Black woman to hold the position, was appointed by Joe Biden. Her term runs until 2038, which further complicates the situation.

The allegations come from William Pulte, head of the Mortgage Market Regulatory Authority (FHFA). Pulte alleges that Cook provided false information about her residence when taking out real estate loans. The US Department of Justice is currently reviewing the allegations, but there are no charges against Cook yet.

Political and economic implications

Trump's statement and subsequent events are also having an impact on financial markets, which have so far reacted cautiously to the political turmoil. Trump is seeking to lower interest rates to stimulate the economy and reduce national debt. However, the Central Bank Council is hesitant because a rate cut could bring with it the risk of rising inflation.

Trump's calls for Fed Chairman Jerome Powell to resign have so far been unsuccessful. Pulte has supported Trump in his attacks on Powell, and Trump recently nominated Stephan Miran as a new economic adviser to the Fed board. These developments could significantly impact the dynamics and decision-making within the Federal Reserve.

Overall, it remains unclear how the situation surrounding Lisa Cook and the reactions of Trump and those around him will develop further. The legal and economic consequences of this dismissal are not yet foreseeable.

For more details on this topic, you can check out the reporting from Time and daily news track.