U.S. President Donald Trump is amplifying concerns in the economy by dismissing Lisa Cook from the Federal Reserve Board of Governors (Fed). Some suggest that this could intimidate all members of the Federal Open Market Committee (FOMC) who discuss benchmark interest rates at the Fed.
Earlier, the U.S. Housing Finance Agency discovered two cases of fraudulent claims regarding mortgage loans by Cook and referred the matter to the Department of Justice. On the 26th (local time), President Trump mentioned during a Cabinet meeting regarding Cook, "It seems she committed an illegal act, which should not happen."
Interest is also focused on Cook, who received the dismissal notice. Cook is the only Black woman among the historical Federal Reserve governors, having been confirmed in 2022 after being nominated by former President Joe Biden. At that time, the Republicans strongly opposed her confirmation, claiming she had "insufficient experience in monetary policy," but he was appointed with overwhelming support from the Democrats and former Vice President Kamala Harris.
Cook has participated in monetary policy discussions in alignment with many, including Chair Jerome Powell, during her tenure and is evaluated as having made few notable statements. As an economist, she has actively conducted research on how racial inequality and wealth gaps have constrained the development of the Black community.
According to the Wall Street Journal (WSJ), Cook was born in Milledgeville, Georgia, in a family of Black civil rights activists. Her mother was the first Black woman professor at Georgia State University, and her father is known to be a prominent local pastor. She spent her school years during a time when racially segregated education was being abolished, and from a young age, she internalized the teaching that "one must raise their voice and hold their ground."
After that, Cook majored in philosophy at Spelman College, a historically Black women's college, earned a humanities degree from the University of Oxford, and developed a serious interest in economic structures while traveling in West Africa. After entering graduate school at UC Berkeley, she had the opportunity to collaborate with the renowned scholar Professor Greg Grossman while researching the Russian economy, and later published studies identifying the correlation between racial discrimination and economic disparities. From 2005, she served as a professor at Michigan State University, teaching economics and international relations.
Cook is also evaluated as being active in community activities outside of academia. She served as a board member and co-chair of the University Musical Society and participated in a social group consisting of University of Michigan faculty members and local figures. Her colleagues have described Cook as "a leader who does not hesitate to share knowledge while listening to the voices of others."
However, Cook is currently under investigation by the Department of Justice due to mortgage fraud allegations. She received real estate loans in Michigan and Georgia in 2021, submitting documents for actual residence but is under suspicion of fraud for renting out the Georgia property the following year. In this regard, President Trump suggested that despite Cook having about 13 years left in her term, she should be immediately dismissed.
Cook stated that there is no legal basis for such an action and that she will confront it with legal action. Her attorney, David Lowell Abe, expressed a firm stance, saying, "We will take all necessary measures to prevent the illegal act attempted by the president."
The Federal Reserve also appears to be defending Cook. On that day, the Federal Reserve stated in a press release, "Long-term terms and dismissal restrictions for board members are important safeguards," and added, "The Federal Reserve will carry out monetary policy decisions as prescribed by law."
According to the Federal Reserve Act, the president may dismiss a governor for 'substantial cause'. However, this is interpreted as being in cases of felony charges or convictions, and there has yet to be an instance of a U.S. president dismissing a Federal Reserve governor.