• Harvard Kennedy School professor says US president does not have authority to fire Lisa Cook
• 'This is a moment of truth where we will see whether the Senate will choose to fulfill its Constitutional responsibility,' expert says

ISTANBUL 

US President Donald Trump announced he has removed Federal Reserve Governor Lisa Cook from her position in an unprecedented move, citing allegations of mortgage fraud.

In a letter shared Monday through the US social media company Truth Social, which he owns, Trump told Cook: “You are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately.”

He said there was “sufficient cause” for her dismissal, pointing to a criminal referral that alleged Cook signed conflicting mortgage documents for properties in the states of Michigan and Georgia.

“It is inconceivable that you were not aware of your first commitment when making the second,” Trump wrote in the letter. The move marks the first time a president is attempting to fire a sitting Fed governor.

The move has sparked criticism about the independence of the Fed and Trump's alleged "abuse of power."

Jeffrey Frankel, a professor of capital formation and growth at the Harvard Kennedy School, told Anadolu that Trump does not have the authority to fire Cook.

"The independence of the Fed was even confirmed recently by the Supreme Court," said Frankel.

"It seems obvious that Trump is throwing scurrilous charges at anyone whom he considers to be an obstacle to his personal interests," he added.

Charles Calomiris, co-director of the Institute for Research in Economics in Washington, said it is likely to be perceived as an attack on Fed independence by Trump.

"And judging from the recent nomination, Trump does want to appoint loyalists to the Board," he said. "The Senate can block appointments to the Fed Board that are unqualified Trump loyalists."

"But will they? It’s not clear that there are enough Senate Republicans with the courage to stop that. But there may be," stated Calomiris.

He stressed that in the US Constitution, control of money is in Article I, Section 8 -- which means Congress is "clearly" intended to lead in that area, not the Executive.

"This is a moment of truth where we will see whether the Senate will choose to fulfill its Constitutional responsibility," he added.

Cook's dismissal may be contested in federal court. The legality of her termination may finally be decided by the Supreme Court.

If the decision by the president is not contested, he would be on pace to have a Fed board with a majority of governors he has nominated.

The move came after Trump warned Cook last week that he would dismiss her if she did not step down.

Cook, who was nominated to the Fed's Board of Governors by former President Joe Biden in 2022, has denied any wrongdoing, and said she has “no intention of being bullied to step down.”

The allegations surfaced after Federal Housing Finance Agency chief Bill Pulte, a vocal critic of Fed Chair Jerome Powell, accused her of mortgage fraud and referred the matter to the Justice Department.

Michelle Bowman and Christopher Waller, two of the current seven Fed governors, were appointed by Trump. In 2017, Powell was nominated by Trump to be the Fed chair.

Cook was one of six members of the Board of Directors as of Monday afternoon; Adriana Kugler resigned earlier this month, leaving one position open, and Trump nominated Stephen Miran, chair of the Council of Economic Advisors, to fill Kugler’s position.

If the Senate confirms Miran and Trump is successful in ousting Cook and gets her replacement approved, he will have a 4-to-3 majority of appointments on the board, giving him the power to influence the central bank's monetary policy decisions.​​​​​​​