White House Renews Effort to Remove Fed Governor Lisa Cook

President Trump has moved again to remove Federal Reserve Governor Lisa Cook from the central bank's board, citing unproven allegations that she made false statements on mortgage applications. The renewed push comes about a month after the Supreme Court blocked his first attempt.

Deputy White House Chief of Staff Daniel Scavino sent Cook a letter this week demanding she answer the claims, which were first publicized last year by Trump ally William Pulte. Even if the conduct "does not rise to the level of felony offense," Scavino wrote, "it appears to demonstrate a level of gross negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator."

Cook denies any wrongdoing. Her lawyer, Abbe Lowell, said the accusations are baseless. "These allegations are as baseless now as they were a year ago when President Trump tried to remove Governor Cook and interfere with the independence of the Federal Reserve," he said, adding that they will challenge the latest effort.

What the court decided

In June the Supreme Court held 5–4 that the Federal Reserve occupies a unique position in the federal government and that a president may remove its governors only for cause. That ruling leaves the lower courts to decide whether the allegations against Cook meet the standard.

The dispute is the latest round in a long confrontation between the White House and the central bank. Trump spent much of the past two years attacking the Fed for not cutting rates faster and threatened to remove then-Chair Jerome Powell. Powell's term as chair ended in May; he remains on the board.

For markets, the question is narrower than the politics: whether a governor can be removed over conduct unrelated to monetary policy, and what that would mean for the independence the Fed's rate decisions are built on.