Trump sets up White House panel to investigate Fed Governor Lisa Cook

Donald Trump has formally established a White House "committee of inquiry" to investigate allegations that Federal Reserve Governor Lisa Cook made false statements about mortgage instruments, marking an unprecedented escalation in his campaign against the central bank's leadership.

The move, announced on Friday through a presidential memorandum, targets Cook—an economist appointed to the Fed board by former President Joe Biden. It represents the latest and most direct attempt by the Trump administration to find a legal pathway to dismiss her.

Why Lisa Cook is being investigated

According to the White House memorandum, which was dated Wednesday, the inquiry will focus on claims that Cook made false statements regarding "one or more mortgage instruments". The document did not provide specific details about the nature of the allegations or the mortgage instruments in question.

Under US law, Federal Reserve governors are protected from political interference and can only be removed by the president "for cause"—a legal threshold historically interpreted as requiring proof of severe inefficiency, neglect of duty, or malfeasance, rather than policy disagreements. By framing the inquiry around allegations of false statements, the administration appears to be searching for the legal grounds necessary to meet that standard.

Neither the Federal Reserve nor Cook’s personal attorney immediately responded to requests for comment on the investigation.

Who is on the committee?

Rather than appointing independent or outside arbiters to lead the investigation, Trump has staffed the panel entirely with executive branch officials.

The three-member committee will be led by Kevin Hassett, Trump’s top economic adviser and a chief defender of the administration's economic record. He will be joined by Keith Sonderling, the acting head of the Office of Government Ethics, and Andrea Lucas, the chair of the Equal Employment Opportunity Commission.

The threat to Federal Reserve independence

The decision to bypass independent investigators is likely to fuel critics who see the inquiry as a highly politicised effort to compromise the Federal Reserve’s independence.

Trump has long pressured the central bank to aggressively cut interest rates. He recently complained that the Fed’s failure to lower rates more quickly was the fault of a "hostile" board, which he claims is blocking the efforts of his handpicked Fed Chair, Kevin Warsh.

While past presidents have occasionally clashed with the Federal Reserve over monetary policy, they have generally respected the firewall between the White House and the central bank. The Fed's independence is widely considered by economists to be essential for maintaining market stability and keeping inflation in check.

If the committee moves to recommend Cook’s removal, it would trigger a major constitutional showdown over the limits of presidential power. No modern administration has attempted to use an internal executive branch tribunal to build a case for firing a sitting Fed governor, making this a test case for how far the White House can go in reshaping the independent agency.