By Ann Saphir
WASHINGTON, Oct 9 (Reuters) – US President Donald Trump launched a new inquiry into Federal Reserve Governor Lisa Cook weeks before congressional elections, convening an investigative committee and ordering an unprecedented White House hearing into allegations she made false statements on mortgage applications.
Trump has been trying to fire Cook for more than a year as he moves to exert more control over a central bank he says is refusing for political reasons to lower interest rates. Lawyers for Cook said on Friday any fair hearing would show there is no legal basis for firing her.
“As President, it is my job to ensure the laws are faithfully executed, including by firing subordinates who cannot be trusted to tell the truth and follow the law,” Trump said in a notice on the White House website on Friday.
“To assist me in carrying out that responsibility, the Committee shall investigate the allegations against Governor Cook and report to me whether there is ’cause’ for Governor Cook’s removal,” according to the notice, dated October 7.
The committee will hold a closed, in-person four-hour hearing at the White House on November 5 “to consider the evidence and allegations against Governor Cook,” the presidential memorandum said.
The hearing falls two days after elections that will determine if Trump’s Republican Party maintains control of the House and Senate, whose members are charged with confirming presidential nominees to the Fed. A successful removal of Cook would create a vacancy on the Fed’s seven-member Board.
If the hearing is “anything close to objective, the conclusion will be that Governor Cook did not commit mortgage fraud, leaving no cause to remove her from the Federal Reserve Board,” Cook’s lawyers Abbe Lowell and Norm Eisen said in a statement. “Governor Cook welcomes the opportunity to present the facts so she can clear her name and demonstrate there is no legal basis to fire her.”
They said they had engaged with the White House about the process.
Trump first tried to fire Cook, the first Black woman to serve on the central bank’s board, in August 2025. No president has ever tried to fire a sitting Fed governor before. Central banks are widely seen as needing political independence to ensure their ability to fight inflation as needed.
SUPREME COURT RULING ON FED REMOVAL
Cook sued, saying she had done nothing wrong. The case led to the US Supreme Court ruling earlier this year that the president could not remove a Fed governor at will, and needed to follow a clear process laying out a ’cause’ for firing and allowing for a defense.
The ruling left Cook in her position but kicked the case against her back to a federal district court, where Judge Kia Cobb last month set a November 6 deadline for Trump’s and Cook’s lawyers to submit a joint proposal for the proceedings.
Cook was appointed to the Fed board in 2022 by former President Joe Biden, a Democrat, and was reappointed in 2023 to a term that lasts until 2038. She has always cast her vote with the majority on the Fed’s policy-making committee, which last month raised interest rates under the leadership of Kevin Warsh, whom Trump appointed to succeed Jerome Powell in May.
“Trump appears to believe that the reason the Fed has turned hawkish is because his chosen chairman Warsh is boxed in by a hawkish and politically hostile Fed Board,” Evercore ISI analyst Krishna Guha wrote. Trump’s creation of the inquiry committee “constitutes a re-upping of his threat to Fed independence and will be counterproductive in terms of the President’s desire for lower interest rates.”
Trump’s chief economic policy advisor Kevin Hassett, Equal Employment Opportunity Commission chair Andrea Lucas, and acting Office of Government Ethics director Keith Sonderling will comprise the newly formed committee, the memorandum said. Those members, their representatives, or Department of Justice personnel will question Cook for “no longer than four hours.”
The committee will make its recommendation to Trump on whether he has cause to remove Cook “as soon as practicable” after a November 10 deadline for Cook to submit any post-hearing statement, the memo said.
Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee that oversees the Fed, called the hearing a “kangaroo court” and part of Trump’s “dangerous quest to illegally take over our nation’s central bank.”
Trump has contended Powell, who has remained at the Fed as governor, may have engaged in financial misconduct related to the Fed’s building renovations, an allegation that sparked a now-closed Department of Justice criminal investigation and was rejected last month by an independent watchdog agency.
(Reporting by Doina Chiacu and Susan Heavey, Michael S. Derby, Ann Saphir, Howard Schneider; Editing by Rod Nickel and Sanjeev Miglani)
Comments