A top White House official said Wednesday that mortgage-fraud accusations against Fed Governor Lisa Cook are “serious” and she should vacate her position instead of waiting for a court decision on President Trump’s attempt to fire her.
Kevin Hassett, the director of the White House National Economic Council, said Mr. Trump “absolutely” has the authority to fire a Fed governor as Ms. Cook pledges to file suit against the president.
“I think the accusations are serious, and I look forward to seeing the outcome,” Mr. Hassett told reporters at the White House.
Mr. Trump moved to fire Ms. Cook late Monday, saying he could no longer trust her with monetary policy amid claims she cited separate properties in 2021 as her primary residences.
Mr. Hassett said Ms. Cook lacks an explanation, so she should take leave from the Fed during the looming legal fight over whether Mr. Trump can fire her.
“The fact that she is not doing that suggests that she is partisan and is trying to make a partisan stance, which is contrary to the independence of the Fed,” Mr. Hassett said.
Ms. Cook is the first Black woman to sit on the Fed’s Board of Governors. President Biden nominated her to the board in 2022.
Her removal and replacement, alongside confirmation of a pending governor nominee, would give the White House a Trump-appointed majority on the Fed board as the White House seeks lower interest rates from central bankers.
Mr. Trump pointed to laws that say a president can fire a Fed governor “for cause,” though what that means is up to interpretation.
“Lisa Cook has indicated through her personal attorney that she will promptly challenge this action in court and seek a judicial decision that would confirm her ability to continue to fulfill her responsibilities as a Senate-confirmed member of the Board of Governors of the Federal Reserve System,” the Fed said in a statement. “As always, the Federal Reserve will abide by any court decision.”
The president is firing Ms. Cook over claims that she signed 2021 documents listing a Michigan property as her intended primary residence and then, shortly later, listed a Georgia property as her primary residence.
Trump officials said the maneuver would have let her get favorable loan terms. The Georgia property was later listed for rent.
The Trump administration says the situation appears to be open and shut, so Ms. Cook should explain herself fully.
Mr. Hassett on Wednesday said the Justice Department is investigating the matter.
The fight could have wide ramifications. Some economists and investors will get skittish if they think the Fed loses its independence and follows political dictates instead of the economic data.
“Congress, through the Federal Reserve Act, directs that governors serve in long, fixed terms and may be removed by the president only ’for cause,’” the Fed said. “Long tenures and removal protections for governors serve as a vital safeguard, ensuring that monetary policy decisions are based on data, economic analysis, and the long-term interests of the American people.”
The central bank added, “The Federal Reserve will continue to carry out its duties as established by law.”
