Moments after Federal Reserve Chair Jerome Powell’s closely watched speech at the Jackson Hole symposium on Friday, President Donald Trump dramatically escalated his ongoing assault on the central bank’s leadership by threatening to fire governor Lisa Cook if she does not resign. The extraordinary move punctuated an already tense week for the central bank, as Trump has been criticizing Cook following allegations of mortgage fraud leveled by Bill Pulte, head of the Federal Housing Finance Agency and a Trump appointee.
As reported by CNBC, Trump made the threat on Friday, during an impromptu visit to the People’s House, a White House–focused educational museum. “What she did was bad,” he told reporters. “I’ll fire her if she doesn’t resign.”
Powell’s speech had signaled potential openness to rate cuts, but emphasized that the Fed was in a tough spot, caught between rising inflation and signs of waning strength in the labor market. Bank of America Global Research has noted that it’s rare for the Fed to cut rates in an environment of rising inflation. It’s happened only 16% of the time in records dating back to 1973, and the last time it happened was the second half of 2007, shortly before the onset of the Global Financial Crisis.
Cook, who is the first Black woman on the Fed board, was accused by Pulte earlier in the week of falsifying property records to gain better loan terms, allegedly listing two primary residences—one in Ann Arbor and another in Atlanta. Pulte urged the Department of Justice to investigate, and Trump quickly seized on the allegations, amplifying his call for Cook’s resignation across social media and at public events. “Cook must resign, now!!!” Trump wrote on Truth Social.
Cook fired back in a public statement Wednesday, declaring, “I have no intention of being bullied to step down from my position because of some questions raised in a tweet,” and affirming her intent to cooperate fully with any legitimate inquiry. The Department of Justice has signaled that it will open a probe into the accusations, adding another layer of uncertainty to the Fed’s leadership and the ongoing political spectacle around the institution.
The growing threat to central bank independence
Analysts warn that Trump’s escalating pressure on Fed personnel—combined with his repeated attacks on Powell and his vow to appoint only officials willing to cut rates—threatens the independence of the central bank, which is structured to insulate its seven-member board from direct executive influence. Appointees can only be removed “for cause,” such as proven misconduct, not mere policy disagreement.
If Cook were to resign or be forced out, Trump would gain another opportunity to appoint a loyalist before the next presidential election, potentially tipping the balance of the board further in his favor. Treasury Secretary Scott Bessent has confirmed that a process is underway to select Powell’s successor.
For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.