Trump raises pressure on central bank, calls for Fed’s Cook to resigs

President Donald Trump ramped up pressure on the US central bank on Wednesday, calling for Federal Reserve Governor Lisa Cook to step down — after his recent criticism of Fed Chair Jerome Powell for not lowering interest rates sooner.

“Cook must resign, now!!!” Trump wrote on his Truth Social platform, while sharing a Bloomberg news report on how the Federal Housing Finance Agency’s director has called for greater scrutiny of Cook over a pair of mortgages.

FHFA director Bill Pulte -- a staunch ally of Trump -- had reportedly written a letter to the US attorney general calling for an investigation of Cook while suggesting that she might have committed a criminal offense.

The Trump administration has pursued allegations of mortgage fraud against high-profile Democrats who are seen as political adversaries of the president.

It was not immediately clear if such a probe will take place targeting Cook, the first Black woman to serve on the central bank’s board.

The president is also limited in his ability to remove officials from the central bank.

A Supreme Court order recently suggested that Fed officials cannot be taken out of their jobs over policy disagreements, meaning they have to be removed for “cause,” which could be interpreted to mean wrongdoing.

The US leader’s targeting of Cook, who sits on the Fed’s rate-setting committee, comes after his repeated broadsides against Powell while the central bank kept the benchmark lending rate unchanged this year.

On Tuesday night, Trump again called for a “major rate cut,” saying there was “no inflation” and claiming that the Fed’s policymaking was harming the housing industry due to elevated mortgage rates.

He called Powell “a disaster” in a social media post.

Although the US consumer price index, a key inflation gauge, was steady at 2.7 percent in July, it remains higher than it was a few months earlier.

Fed officials have been trying to ensure inflation is kept in check -- despite the effects of Trump’s sweeping tariffs -- while balancing risks to the labor market as they mull the right time for further rate cuts.

Cook took office as a Fed governor in May 2022 and was reappointed to the board in September 2023. She was sworn in later that same month for a term ending in 2038.

She has previously served on the Council of Economic Advisers under former president Barack Obama.

Earlier this year, Trump suggested that what he called an overly costly renovation of the Fed’s headquarters could be a reason to oust Powell, before backing off the threat.

Powell’s term as Fed chair ends in May 2026.

Meanwhile, The dollar fell on Wednesday after US President Donald Trump called on Federal Reserve Governor Lisa Cook to resign, as investors also waited on a speech by Fed Chair Jerome Powell on Friday for clues on interest rate policy.

Trump cited a call by the head of the US Federal Housing Finance Agency urging the Department of Justice to probe Cook over alleged mortgage fraud. Spokespeople for Cook and the Fed did not immediately respond to requests for comment.

“The market has voted with its pocketbook that it doesn’t like when the president interferes with the Federal Reserve,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.

Trump has been critical of Powell for being to slow to cut rates, and traders expect he will replace the Fed Chair with a more dovish appointment when his term ends in May.

But Powell may stay on the board of governors, which would limit how many appointments Trump may make and could crimp plans to form a more dovish composition of policymakers.

“This is just a thinly veiled attempt to get control of the Federal Reserve, because if Powell doesn’t step down as Governor when his chair ends, Trump’s only appointment is the Kugler seat that he gave to Miran temporarily,” Chandler said.

Trump earlier this month said he would nominate Council of Economic Advisers Chairman Stephen Miran to serve out the final few months of a vacant Fed seat after Fed Governor Adriana Kugler unexpectedly resigned.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was last down 0.16% on the day at 98.16, with the euro up 0.15% at $1.1664.

The Japanese yen strengthened 0.21% against the greenback to 147.37 per dollar.

Traders are focused this week on whether Powell will push back against market expectations for a rate cut at the Fed’s September 16-17 meeting when he speaks at the U.S. central bank’s Jackson Hole meeting on Friday, following a weak jobs report for July.

Powell has said he is reluctant to cut rates on expectations that Trump’s tariff policies will increase inflation this summer.

Agencies