The US president has cited mortgage fraud allegations in his attempt to oust Lisa Cook

US President Donald Trump has taken steps to remove Federal Reserve Governor Lisa Cook, but her lawyer said they would contest the move, arguing that he lacks the authority to do so.

In alettersent to Cook on Monday and posted on his Truth Social platform, Trump said he had "sufficient cause" to dismiss the first Black woman to sit on the Federal Reserve Board (FRB). He justified the firing, effective immediately, by pointing to allegations that she falsified records in order to obtain favorable mortgage terms.

The accusations came from Federal Housing Finance Agency Director Bill Pulte, a Trump appointee who alleged Cook had falsified information in loan applications for two homes, one in Michigan and another in Georgia, by claiming each was her primary residence in order to obtain better mortgage terms.

Trump said the fraud claims had compromised Cook and argued she could no longer act as an effective financial regulator, invoking a provision in the Fed's founding law that he said allows a president to dismiss governors for cause.

Cook was appointed to the Federal Reserve Board in 2022 by then-President Joe Biden, with a term running until 2038. In a statement released through her lawyer on Monday, she said Trump had "purported to fire me 'for cause' when no cause exists under the law, and he has no authority to do so. I will not resign."

Under the Federal Reserve Act, a governor may only be removed for cause, usually defined as neglect of duty or misconduct. Legal experts have questioned whether Trump has met that standard, noting that the allegations are unproven in court and involve personal matters.

Since taking office, Trump has pressed the Federal Reserve for rapid monetary easing. The FRB, stressing its independence, has resisted lowering interest rates, warning that tariffs introduced by the president could stoke inflation.

He has countered that import duties are not driving prices higher and accused Fed Chair Jerome Powell of keeping rates too high, raising debt-servicing costs.

(RT.com)