Trump Fires Fed Governor Cook, Fueling Policy Uncertainty
Markets dip as the move raises questions over the central bank's independence amid White House pressure for rate cuts.
President Donald Trump dismissed Federal Reserve Governor Lisa Cook on Monday over allegations of mortgage impropriety, a move that escalates his campaign to reshape the central bank and injects fresh uncertainty into the future of U.S. monetary policy.
The announcement, made via a letter posted on social media, accused Cook of making false statements on mortgage applications. The allegations were first raised by William Pulte, a Trump-appointed director at the Federal Housing Finance Agency. Cook, the first African-American woman to serve as a Fed governor, had called the claims baseless and vowed to fight them, stating, “I have no intention of being bullied to step down.”
U.S. markets reacted with caution to the news. The S&P 500 and Dow Jones Industrial Average both registered modest declines of 0.16% and 0.37%, respectively, on Monday. The pullback reflected investor unease over the central bank's stability rather than outright panic, as traders were already digesting recent dovish commentary from Fed Chair Jerome Powell.
The firing is seen as the latest step in President Trump's effort to exert influence over the Fed, which he has repeatedly pressured for aggressive interest rate cuts. Cook’s departure could accelerate the president's ability to reshape the board's composition. The move comes as futures markets are pricing in an 87% probability of a rate cut next month, and investors are keenly awaiting key inflation data to guide the Fed’s next steps.