Dear brothers and sisters, Trump has really taken action against the Federal Reserve, but this time, his target is not Powell.
Trump is considering firing Fed officials
On the evening of August 20th, according to a senior White House official and another source with knowledge of the situation, Trump indicated that he is considering trying to fire a Fed governor appointed by Biden because his housing official has accused the governor of mortgage fraud.
The director of the Federal Housing Finance Agency (FHFA), Bill Pulte, accused Fed Governor Lisa Cook of submitting “fraudulent information” on two mortgage applications on Wednesday morning on social media.
Trump later responded on social media, “Cook must resign immediately!!!” However, in private, Trump’s attitude is even more aggressive. According to the two sources mentioned above, if she doesn’t resign, Trump is discussing ways to fire her with “for cause”.
Pulte’s post stated that in 2021, Cook applied for mortgages for two properties – one in Michigan and another in Atlanta – and both applications were submitted as her “primary residence” despite being submitted on different days 14 days apart. The post included images of documents that seemed to be signed by Cook but did not provide other evidence. Pulte said he would submit these materials to the Department of Justice as a criminal complaint.
The complaint documents showed that Cook purchased a property in Ann Arbor in 2021 with a loan of $203,000 for a 15-year term. The documents stated that she should make this property her primary residence within 60 days and live there for at least one year unless otherwise agreed in writing by the lender, the University of Michigan Credit Union. The date of the document is June 18, 2021, and it is unclear whether the lender was aware or approved of her subsequent purchase.
Then on July 2, 2021, Cook purchased another property in Georgia with a loan of $540,000 for a 30-year term. This loan also contained residency requirements, requiring the borrower to make it their primary residence within 60 days and live there for at least one year.
Pulte accused Cook in his letter of “apparently obtaining loans that did not meet some of the loan requirements and may have obtained better interest rates under fraudulent conditions.”
He cited four criminal laws as possible bases for prosecution and also submitted rental information for the Georgia property, stating that it “shows the property was used for investment/rental purposes rather than as a primary residence.”
Affected by the news of Trump calling for Cook’s resignation, the US dollar weakened, the decline in US Treasury yields narrowed, and the price of gold rose.
This allegation is the latest escalation of the White House’s recent attacks on the Federal Reserve. Although Puert, as the head of FHFA, leads an organization that has little interaction with the Fed, he has become a front-line figure in the White House’s attack on the Fed, frequently attacking Fed Chairman Jerome Powell in social media posts and TV interviews.
In July, Puert also joined a group of Fed insiders who criticized Powell for spending heavily on the renovation of the Fed’s headquarters project. He posted on platform X that Powell should resign or be fired, and even claimed that Powell had a “fantasy” about the connection between tariffs and inflation. He also forwarded unfounded rumors about Powell’s imminent resignation in statements with the FHFA logo.
Cook was nominated by former President Biden in 2022 and is currently a member of the Fed’s seven-person board, serving until 2038. During her tenure, her voting stance has been largely in line with Powell and the majority of the Federal Open Market Committee (FOMC). She is the first African American woman to serve on the board.
The White House’s recent frequent attacks on the Fed coincide with Trump’s continued complaints that Powell and other Fed officials have not cut interest rates during their five meetings this year.
With the release of weak job market data in early August, many investors are watching to see if the Fed will make its first rate cut at its meeting on September 17th. The market will pay close attention to Powell’s speech at this week’s annual central banking conference in Jackson Hole, Wyoming, to find signals for the Fed’s next move.
Over the past few months, two Fed board members appointed by Trump, Michelle Bowman and Christopher Waller, have been advocating for interest rate cuts with detailed economic justifications,反驳了关税会推高通胀的观点。Both opposed the decision to keep interest rates unchanged at the July meeting.