The White House has renewed its effort to remove Federal Reserve Governor Lisa D. Cook from the central bank's board, sending her a letter this week that gives her three weeks to respond to allegations tied to her mortgage-loan applications.
The letter, attributed to Deputy White House Chief of Staff Dan Scavino, characterizes Cook's conduct as "gross negligence" — language that carries potential criminal exposure, though she has not been charged with any crime. The underlying allegations were first raised by William Pulte, the Trump ally who oversees Fannie Mae and Freddie Mac as director of the Federal Housing Finance Agency. Cook's attorney, Abbe Lowell, has called the allegations baseless and is expected to challenge the renewed process in court.
A fight over "for cause"
The push revives an effort the administration first launched last year as part of a broader campaign to pressure the Fed into cutting interest rates. In June, the Supreme Court ruled 5-4 that a president may remove a Fed governor only "for cause," with Chief Justice John Roberts writing that Cook was entitled to notice and a chance to respond before any for-cause removal could proceed. That ruling kept her on the board through an injunction but left the door open for the administration to try again once it followed proper procedure — which this week's letter appears designed to satisfy.
Cook has denied all wrongdoing since the allegations first surfaced. Her legal team is expected to argue that the mortgage claims fall well short of the "for cause" bar the justices set, setting up a renewed legal fight that will test how much independence the Fed's governors actually have from White House pressure.
The Federal Reserve's board confirmed Cook's appointment in 2022, and she has since become a focal point in the president's broader dispute with the central bank over the pace of rate cuts. Her response is due within three weeks; litigation is expected to follow soon after.
Fed watchers say the case is now the clearest test yet of the "for cause" standard the Supreme Court articulated in June, and its outcome could shape how much latitude future presidents have to reshape the central bank's leadership. A ruling against Cook could also rattle markets already sensitive to signs of political interference in monetary policy, coming just weeks after Friday's surprisingly weak jobs report shifted expectations for the Fed's next move.
