Second criminal referral filed against first Black woman Fed governor as markets reject Trump's central bank interference
President Donald Trump's escalating campaign against Federal Reserve independence has zeroed in on Governor Lisa Cook, the first Black woman to serve on the central bank's board, with Federal Housing Finance Agency Director Bill Pulte filing a second criminal referral alleging mortgage fraud just days after a court hearing on Trump's attempted firing.
The targeting of Cook follows a similar pattern to Trump's Justice Department investigations of New York Attorney General Letitia James, who successfully prosecuted Trump for $454 million in real estate fraud. Both cases appear designed to neutralize Trump critics through criminal allegations related to mortgage documentation.
Trump's assault on Fed independence began with attempts to remove Chair Jerome Powell, using a $2.5 billion building renovation project as justification for firing the central bank chief "for cause." However, financial markets reacted negatively to threats against Fed independence, with concerns about undermining monetary policy credibility leading Trump to back down.
"It was 'highly unlikely' that he would ultimately remove Powell before his term expires in May 2026," Trump admitted after initially calling the renovation project a "firing offense." The Supreme Court had signaled Trump couldn't fire Powell simply over interest rate disagreements, forcing the administration to seek alternative grounds.
With Powell proving too costly to target due to market concerns, Trump shifted focus to Cook, whose removal would be less likely to trigger financial instability while still advancing his goal of controlling Fed policy.
Cook's targeting mirrors the Justice Department's investigation of James, both involving mortgage documentation issues spanning decades. James faces scrutiny over a 1983 form where her father mistakenly listed her as his spouse rather than daughter, along with minor discrepancies on property documents from 2001 and 2023.
Similarly, Cook faces allegations about mortgage applications for properties in Michigan, Georgia, and Massachusetts, with claims she misrepresented occupancy status. Attorney Abbe Lowell called Pulte's actions "an obvious smear campaign aimed at discrediting Gov. Cook by a political operative."
The parallel investigations suggest a coordinated strategy to weaponize mortgage fraud allegations against prominent Trump critics, particularly those who have successfully challenged him legally or policy-wise.
Cook's academic background includes extensive research on discrimination in financial markets and support for policies addressing racial wealth gaps, positions that align with reparations advocacy. Her appointment by President Biden specifically aimed to increase diversity in Fed leadership and bring perspectives on economic inequality.
As an economics professor at Michigan State University before joining the Fed, Cook published research on how discrimination affects entrepreneurship and economic development in Black communities. Her scholarly work directly challenges conventional economic thinking that ignores systemic racial barriers.
This background makes Cook a particularly attractive target for Trump's broader campaign against diversity, equity, and inclusion programs across government agencies.
Pulte, appointed by Trump to lead the Federal Housing Finance Agency, has emerged as the administration's primary weapon against Cook. His rapid succession of criminal referrals - filed August 15 and August 28 - demonstrates coordinated pressure beyond normal regulatory oversight.
"As Director of the U.S. Federal Housing Finance Agency," Pulte wrote in his second referral, "I reiterate the referral on August 15, 2025, and provide new information concerning a 3rd property." The timing, just after Cook's court hearing, suggests strategic escalation.
Pulte has used social media extensively to attack Cook, posting "more than 30 times in the last two days" demanding her removal, according to her attorney. This social media campaign parallels Trump's own tactics against Fed officials who resist his pressure for rate cuts.
Judge Jia Cobb heard arguments Friday on Cook's request for a temporary restraining order preventing her removal, but ended the two-hour hearing without ruling. Cook's lawsuit challenges Trump's authority to fire Fed governors without legitimate cause.
"You can't have Director Pulte's crazy midnight tweets be the cause," Lowell told the court, highlighting the political nature of the allegations. The Justice Department argued Trump has "discretion" to determine cause for removal, a position that would effectively eliminate Fed independence.
The case could reach the Supreme Court to determine what constitutes legitimate cause for removing Fed governors, potentially setting precedent for future presidential interference in monetary policy.
Cook's targeting represents part of Trump's comprehensive effort to control Federal Reserve policy through personnel changes. If successful in removing Cook, Trump would be positioned to nominate a majority of the seven-member Fed board.
The administration has simultaneously pressured Powell through building renovation allegations while targeting Cook through mortgage fraud claims, demonstrating multiple avenues for undermining Fed leadership. This approach allows Trump to appear concerned about government efficiency and fraud while actually pursuing political control.
The strategy reflects Trump's broader pattern of using law enforcement and regulatory agencies to pursue personal vendettas against critics, from New York prosecutors to Federal Reserve governors who resist his economic preferences.
Fed independence has been crucial for monetary policy credibility since the Watergate era, with presidents traditionally avoiding interference in interest rate decisions. Trump's campaign against Fed leadership threatens this institutional norm and could undermine confidence in U.S. monetary policy.
Cook's case will test whether Trump can successfully weaponize mortgage fraud allegations to remove Fed officials who oppose his policies. Her removal would eliminate a voice for economic research on racial inequality while advancing Trump's goal of controlling interest rate decisions.
The outcome may determine whether Federal Reserve independence survives Trump's second presidency or becomes another institutional norm sacrificed to presidential power consolidation.