President Trump has fired Federal Reserve governor Lisa Cook - who is refusing to acknowledge the president's order.
In a letter notifying Cook of his decision, Trump explained that she no longer works for the nation's central bank "effective immediately" because she has been credibly accused of mortgage fraud.
The president may remove Fed governors "for cause," Trump noted in his letter to Cook, who swiftly challenged the move.
"The Federal Reserve Act provides that you may be removed, at my discretion, for cause," Trump wrote.
Trump had called for Cook to resign last week after a federal housing regulator, Bill Pulte, filed a criminal referral to the Justice Department that accused Cook of claiming two different homes as her primary residence.
"For example, as detailed in the Criminal Referral, you signed one document attesting that a property in Michigan would be your primary residence for the next year," Trump explained.
"Two weeks later, you signed another document for a property in Georgia stating that it would be your primary residence for the next year. It is inconceivable that you were not aware of your first commitment when making the second. It is impossible that you intended to honor both,” Trump wrote.
At best, Cook made a damning mistake that disqualifies her from serving as a top financial regulator, Trump said. At worst, she engaged in "deceitful and criminal conduct."
"The Federal Reserve has tremendous responsibility for setting interest rates and regulating reserve and member banks. The American people must be able to have full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve,” Trump added
“In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity."
"At a minimum, the conduct at issue exhibits the sort of gross negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator.”
By removing Cook - an appointee of Joe Biden and the first black woman to serve on the Federal Reserve Board - Trump has an opening to increase his influence over the central bank, which sets the nation's monetary policy, including the interest rates that influence mortgage costs.
Cook is demanding her job back, and she has hired former Hunter Biden lawyer Abbe Lowell, who said a lawsuit would be forthcoming.
But Trump - who last week had a $500 million penalty against him thrown out on appeal, just his latest victory against Democratic party lawfare - told reporters that he is "always ready" for a legal fight.
"She seems to have had an infraction and she can't have an infraction. And especially that infraction because she's in charge of, if you think about it, mortgages. We need people that are 100% above board, and it doesn't seem like she was," Trump said Tuesday.
