Hold on to the Federal Reserve! U.S. Treasury Secretary "interrogates" Governor Cook: We have never heard her deny the allegations

After President Trump personally intervened and set a precedent by directly issuing a dismissal letter to fire Federal Reserve Governor Cook, officials in the Trump administration continue to target the Federal Reserve.

On Wednesday, the 27th, Eastern Time, U.S. Treasury Secretary Mnuchin raised questions regarding the allegations of mortgage fraud against Federal Reserve Governor Cook, stating that he had never heard Cook herself deny the alleged fraudulent behavior, and once again called on Federal Reserve Chairman Powell to conduct an internal review of the Fed. When asked if Trump's firing of Cook was part of his plan to gain a majority on the Federal Reserve Board, Mnuchin emphasized the independence of the Fed's governors.

Treasury Secretary Questions Cook's Denial of Allegations, Calls for Internal Review of the Fed Again

In a media interview on Wednesday, Mnuchin expressed a clear stance on the Cook incident. He stated:

"She (Cook) has been saying that Trump does not have the power to fire her, but we have never heard her say that she did not do those things."

Mnuchin called for an investigation into Cook, believing that if the investigation confirms the allegations against her, she should be prosecuted.

Mnuchin reiterated his call for an internal review of the Federal Reserve. He said:

"I have encouraged Chairman Powell to conduct an internal review before any external review." "(The Cook incident) is the kind of thing that needs to be resolved."

Wall Street Journal mentioned that if Trump successfully removes Cook and replaces her with his nominee, he will hold a majority of four seats on the seven-member Federal Reserve Board. Trump also stated on Tuesday that he is considering some "very good people" to replace Cook, at which point the majority of the Fed's board members would support his desire for significant interest rate cuts.

On Wednesday, when asked if firing Cook was part of Trump's plan to gain a majority on the Federal Reserve Board, Mnuchin responded:

"All Federal Reserve governors are independent."

At last month's Federal Open Market Committee (FOMC) meeting, two governors, Waller and Bowman, voted against the decision because they supported a rate cut at that time rather than maintaining the policy rate.

Mnuchin pointed out on Wednesday that the government would not instruct Waller and Bowman, who were nominated by Trump during his first term, on how to vote at the FOMC meeting.

Trump's Chief Economic Advisor Pressures Cook to Take Leave

In addition to Mnuchin, other members of the Trump administration are also publicly pressuring Cook.

On the same Wednesday, Trump's chief economic advisor and director of the White House National Economic Council, Hassett, stated that Cook should take a leave of absence during the litigation.

"If I were her, in her situation, I would take a leave of absence right now. That would be the decent thing to do."

Some media pointed out that Cook referred to Trump as "absolutely a fascist" in 2020, further intensifying political tensions.

In contrast to the Republican criticism, Democratic Senator Elizabeth Warren defended Cook, stating to the media that the mortgage fraud allegations against Cook are unrelated to her work and therefore do not constitute "just cause" for dismissal

Mortgage Fraud Allegations Trigger Dismissal Controversy

The controversy surrounding Cook's dismissal began with a criminal referral submitted to the Department of Justice by Bill Pulte, the director of the Federal Housing Finance Agency appointed by Trump last week.

Pulte accused Cook of claiming that two properties in Ann Arbor, Michigan, and Atlanta, Georgia, were her primary residences in her mortgage applications.

Pulte stated, "In Ms. Cook's case, from what we understand, this appears to be blatant mortgage fraud. She claimed to reside in Michigan and applied for a loan. Then she went to Atlanta and applied for another loan, stating that both properties were her primary residences. This is a serious violation."

Pulte believes that Cook's deceptive claims were aimed at potentially obtaining lower interest rates and more favorable loan terms.

Lenders typically offer better terms for primary residences, including lower interest rates, smaller down payments, higher loan-to-value ratios, and more lenient borrowing standards. Mortgage fraud can be prosecuted under federal and state laws, with penalties including imprisonment and hefty fines.

On Monday evening Eastern Time, Trump suddenly posted a related letter on social media announcing Cook's dismissal. He cited Pulte's allegations, stating that the dismissal was effective immediately, marking the first time a U.S. president attempted to remove a Federal Reserve governor. According to the central bank management laws established by Congress, Federal Reserve governors can only be removed for "cause," typically understood as misconduct or malfeasance.

Legal Challenges and Federal Reserve Response

Cook announced on Tuesday that she would file a lawsuit against the dismissal decision. Her attorney, Abbe Lowell, stated in a release, "President Trump has no authority to remove Federal Reserve governor Lisa Cook. He is attempting to dismiss her based solely on a referral letter, which has no basis in fact or law. We will file a lawsuit to challenge this illegal action."

In a statement on Tuesday, Cook said, "President Trump claims to have cause to dismiss me, but there is no legal basis for this, nor does he have such power. I will not resign; I will continue to fulfill my duties and help the U.S. economy as I have since 2022."

The Federal Reserve issued its first statement on the matter on Tuesday, indicating that Cook had expressed through her private attorney that she would immediately challenge this action in court. "The long terms of governors and the protection against arbitrary removal are important safeguards to ensure that monetary policy decisions are based on data, economic analysis, and the long-term interests of the American people," the Federal Reserve stated, adding that it would comply with any court ruling.

If Cook files a lawsuit, the case could ultimately be decided by the U.S. Supreme Court, with implications for the independence of the Federal Reserve and the boundaries of presidential power.

In contesting the dismissal order, Cook could immediately seek an injunction to restore her position during the litigation