Cook Mortgage Fraud Allegations Escalate — Will the 2025 Jackson Hole Symposium Become a Battle for Central Bank Independence?

TradingKey - After months of pressuring Federal Reserve Chair Jerome Powell to cut rates with limited success, the Trump administration has now turned its focus to Fed Governor Lisa Cook, reportedly seeking her removal over allegations of mortgage fraud. The move has intensified concerns over the erosion of Federal Reserve independence, and global central bank leaders may use the 2025 Jackson Hole Symposium to mount a defense of central bank autonomy.

On Wednesday, August 20, Bill Pulte, Director of the Federal Housing Finance Agency (FHFA), posted on social media platform X that he had submitted a criminal referral to the U.S. Department of Justice, accusing Governor Lisa Cook of misconduct in the application for two home mortgage loans, alleging mortgage fraud.

Pulte claimed that Cook may have falsified bank documents and property records to secure more favorable loan terms. President Donald Trump quickly responded, stating that Cook must resign immediately.

Cook, appointed by former President Biden in 2022, is the first Black woman to serve on the Fed’s Board of Governors. Her term runs until 2038.

Notably, Pulte is a staunch ally of Trump. Combined with Trump’s months-long pressure on Powell to cut rates and his nomination of a “MAGA-aligned” replacement for the vacant seat left by Governor Adriana Kugler, the move against Cook is widely seen as another political maneuver aimed at shifting the Fed’s policy direction toward easier monetary policy.

Cook responded that she will not be bullied into resigning over issues raised in a social media post and is gathering accurate information to respond.

The controversy comes just ahead of the 2025 Jackson Hole Economic Symposium, set for August 21–23. While markets will watch for Powell’s stance on a September rate cut, the threat to Fed independence may emerge as a central theme of the gathering.

Senator Elizabeth Warren, who oversees the FHFA, said the Trump administration should not weaponize federal agencies to illegally remove independent Fed board members.

Warren added that for months, the Trump administration has been rushing to find pretexts to intimidate or remove Fed officials, blaming anyone but himself for the damage its economic policies are inflicting on American households.

Bloomberg reported that global central bankers heading to Jackson Hole — including European Central Bank President Christine Lagarde and Bank of England Governor Andrew Bailey — may express strong support for Powell and warn that political pressure on monetary policymakers is dangerous. This is especially relevant for economically vulnerable nations, where leaders might be emboldened by Trump’s actions to exert similar influence.

Joachim Nagel, President of the German Bundesbank, said:

“Independence is part of the DNA of central banks. It would be more than desirable if this were recognized everywhere.”

Peterson Institute for International Economics noted that at the June BIS meeting and July ECB forum, global central bank leaders emphasized this issue and publicly supported the Fed’s independence.

“Now, this is their opportunity to do it for a US audience.”

Last month, ECB President Lagarde called Powell a courageous central banker, praising his efforts to resist political pressure and uphold the Fed’s dual mandate of price stability and maximum employment.