If Rates Don't Fall, It's Over... Trump Demands Fed Governor's Resignation Over 'Mortgage Scandal'

Trump Demands Cook's Immediate Resignation Over Alleged Mortgage Fraud
Underlying Motives: Pressure for Rate Cuts and Reshaping the Fed

U.S. President Donald Trump has called for the resignation of Federal Reserve (Fed) Governor Lisa Cook. While he cited allegations of false statements related to mortgage loans, analysts suggest that his underlying motives are to pressure for interest rate cuts and to reshape the Fed's leadership.

On August 20 (local time), President Trump shared a Bloomberg article on his social networking service, Truth Social, writing, "Cook must resign immediately!!!"

The article reported that Federal Housing Finance Agency (FHFA) Director Bill Pulte had requested Attorney General Pam Bondi to investigate Governor Cook's mortgage transactions.

Director Pulte pointed out that Governor Cook purchased homes in Michigan and Georgia in 2021, obtained mortgages for both, and listed both as "residential," but later converted the Georgia property to a rental. He claimed that Cook "forged bank documents and real estate records to obtain more favorable loan terms, which could constitute mortgage fraud under criminal law," and formally requested an investigation by the Department of Justice. He also argued that "this alone is sufficient grounds for dismissal."

President Trump immediately echoed Director Pulte's claims and called for Governor Cook's removal.

However, in political and financial circles, this incident is seen not simply as a case of alleged mortgage fraud, but rather as part of President Trump's strategy to pressure for interest rate cuts and reorganize the Fed's leadership. Analysts suggest that he aims to replace current board members who are reluctant to lower rates with pro-Trump figures.

The Fed Board consists of seven members: one chair, two vice chairs, and four governors, all of whom serve as ex officio members of the Federal Open Market Committee (FOMC) and hold voting rights on interest rate decisions. Among them, Vice Chair Bowman and Governor Waller, previously considered hawkish (favoring monetary tightening), have shifted toward supporting rate cuts. Recently, after the sudden resignation of Governor Adriana Kugler, Steven Miran, the White House Council of Economic Advisers (CEA) chair known as "Trump's economic strategist," was appointed to fill the vacancy. If Governor Cook also resigns and President Trump appoints someone who will fully support his push for rate cuts, four out of the seven Fed board members would lean toward lowering rates. This dynamic could significantly influence the remaining five FOMC voting members who are not board members, out of the total twelve.

Since taking office, President Trump has consistently pressured the Fed to cut interest rates. However, Fed Chair Jerome Powell, concerned about tariff-driven inflation, maintained a freeze throughout the year. President Trump repeatedly mentioned the possibility of dismissing Chair Powell, but was unable to act due to a lack of legal authority. Recently, he has increased pressure by claiming that the cost of renovating the Fed headquarters is too high and again raising the possibility of lawsuits and Powell's dismissal, fueling controversy over the Fed's independence.