The Trump administration has sent a formal warning letter to Federal Reserve governor Lisa Cook, reviving its effort to remove her from the United States' central bank amid a deepening dispute over interest rate policy. The letter, signed by White House Deputy Chief of Staff Dan Scavino and dated August 5, 2026, notified Cook that the president is "considering removing you from your position" and gave her until August 26 to respond to mortgage fraud allegations she has firmly denied.
Cook, the first Black woman to serve as a Fed governor, was nominated to the Federal Reserve's Board of Governors in 2022 by President Joe Biden. The fraud allegations against her stem from a criminal referral made last year by Bill Pulte, director of the Federal Housing Finance Agency. The claim centres on Cook having listed two properties — one in Ann Arbor, Michigan, and one in Atlanta, Georgia — as her "primary residence" in mortgage documents filed in mid-2021. Buyers who designate a home as a primary residence can qualify for lower mortgage rates and smaller down payments. Cook's lawyer, Abbe Lowell, has argued that the Michigan property has been her main home since 2005, that the Atlanta notation was an isolated error, and that an earlier application to the same lender had described the Atlanta condo as a vacation home. Legal experts and her defence team stress there is no conclusive evidence of intent to deceive, making a successful fraud prosecution unlikely.
The move comes despite a Supreme Court ruling in June that, by a 5-4 margin, allowed Cook to remain in her post while her legal challenge proceeds. Chief Justice John Roberts noted in a footnote, however, that nothing prevented Trump from attempting to fire her again provided she received proper notice and a chance to contest the decision — an opening the administration is now explicitly exploiting. The Federal Reserve, founded in 1913, has historically been shielded from political interference; under law, its governors can only be removed "for cause" and serve 14-year terms, safeguards designed to keep monetary policy insulated from short-term political pressures.
The broader context is a prolonged clash between Trump and the Fed over interest rates. The central bank has held rates steady for five consecutive meetings, citing elevated inflation — a position Cook publicly reinforced on the very day the letter was dated, when she told an economic luncheon in Alaska that inflation remains "too high" and that she stands ready to raise rates if necessary. Trump, who has repeatedly called for the lowest interest rates in the world, replaced former Fed chair Jerome Powell with his own appointee, Kevin Warsh, in May, though Warsh has also yet to deliver the rate cuts the president demands.
No president since the Federal Reserve's founding has sought to oust a sitting governor. Lowell condemned the latest move as baseless, stating: "These allegations are as baseless now as they were a year ago. There is no valid cause for removing Governor Cook. As we did before, we will challenge this latest pretext and preserve her position and the historic role of the Fed." The dispute is widely seen as a test of institutional independence at one of the world's most influential financial institutions.