Trump demands "resignation of Lisa Cook, Fed Governor"... Escalates all-out attacks on the Fed

Of the 7 Fed Governors, intention to nominate new members who will support rate cuts

Increased legal scrutiny of Democratic politicians and appointees

President Donald Trump has intensified pressure on the Federal Reserve by demanding the immediate resignation of Federal Reserve Board member Lisa Cook. This move demonstrates that President Trump is expanding his attacks on the Fed, pressuring not only Chair Powell but also other board members for a rate cut.

According to CNBC and Bloomberg on the 20th (local time), President Trump based his demand for Cook's resignation on the mortgage investigation request sent by Bill Pulte, head of the Federal Housing Administration (FHA), to the Department of Justice.

After Trump called for Cook’s ouster, the dollar weakened, bond yields reduced their decline, and gold prices rose.

The FHA chief claimed that Cook may have forged banking documents and real estate records to obtain favorable loan terms. If this is true, it would constitute mortgage fraud. A letter containing these allegations was sent to Attorney General Pam Bondi.

Lisa Cook, formerly a professor at Michigan State University, was appointed to a 16-year term as Fed Governor by then-President Joe Biden in 2022. She is also the first woman of color to serve as a Federal Reserve Governor in history.

On the 8th, Fed Governor Adriana Kugler announced her resignation from the board without any explanation, and Trump appointed White House Council of Economic Advisers Chair Steve Miran to serve until January. If Cook also resigns, the number of Republican-appointed, rate-cut-friendly board members could increase from three to four out of seven on the Board of Governors.

President Trump has made it clear that he will only nominate a new chair who agrees to rate cuts to succeed Jerome Powell. The market is concerned that such demands may compromise the Fed's independence and lead to someone who prioritizes pleasing Trump.

Trump has strengthened legal scrutiny not only of his Democratic political opponents but also of Democratic appointees.

The Trump administration is investigating Adam Schiff, State Senator of California, and Letitia James, Attorney General of New York, for alleged mortgage fraud, although neither has been indicted so far. Both are longtime Trump adversaries.

FHA chief Pulte asserted that while obtaining mortgages for properties in Ann Arbor, Michigan, and Georgia, Cook may have used at least one property for rental purposes, despite contractual agreements to use it as a residence.

Cook has continued to express concerns that tariff hikes could increase inflation but has also cautioned about labor market weakness. Earlier this month, she described the July jobs report, which showed significant employment slowdown, as worrisome.

Jung-Ah Kim, Guest Reporter kja@hankyung.com