White House National Economic Council Director Kevin Hassett addressed the recent controversy surrounding the potential removal of Federal Reserve Board member Lisa Cook, distancing himself from the matter and firmly rejecting any suggestion he might succeed her.
Hassett characterized the attempt to oust Cook as a "law enforcement issue" and declined to discuss the specifics of the allegations. "I'm an economist, I can't add anything to this," he stated during an interview. When asked if he would be a candidate to replace Cook, Hassett gave a definitive "no," adding, "I can assure you that is not going to happen."
Beyond the personnel dispute, Hassett offered his personal views on current monetary policy. He noted that given strong supply-side dynamics and recent inflation reports showing price declines, he would advocate for maintaining interest rates at their current level or cutting them if he were on the Federal Reserve Board. "If I were to do anything in the future, I would want to see more months like the one we just had," he said, emphasizing the importance of further inflation data in shaping policy decisions.
The White House has issued a formal ultimatum to Cook, sending a three-page letter signed by White House Personnel Director Dan Scavino last Wednesday. The letter states that President Trump is "considering removing you" and demands a formal response by August 26 regarding unsubstantiated mortgage fraud allegations. The accusations claim Cook fraudulently listed properties in Michigan and Georgia as her "primary residence" to secure better loan terms in 2021.
The letter harshly criticizes Cook, stating, "Even if your conduct does not rise to the level of a felony, it appears to demonstrate gross negligence in financial transactions, casting doubt on your ability and credibility as a financial regulator." Cook, appointed by former President Joe Biden in 2022, holds a board term that extends until 2038.
Observers tracking the Federal Reserve warn that successfully removing Cook could have severe consequences. It would not only undermine the central bank's independence but also set a precedent for the administration to oust other board members on similar grounds, potentially allowing Trump to appoint candidates who support his calls for lower interest rates.
The escalating conflict touches on a Supreme Court precedent from earlier this year. In June, the court ruled 5-4 to keep Cook in her position, rejecting Trump's initial attempt to remove her, stating he had not provided adequate notice or a chance to respond. The latest letter from Scavino addresses this ruling, telling Cook, "This is your opportunity to respond."
Cook's legal team has responded forcefully, releasing a statement vowing to continue fighting the removal effort. Cook has not been formally charged with any wrongdoing and has consistently maintained the allegations are baseless, relying on "carefully selected, incomplete" document excerpts. Her attorneys reiterated, "These allegations are as unfounded now as they were a year ago when President Trump first tried to remove Governor Cook and interfere with the Fed's independence. Regardless of what President Trump attempts next, the facts and Supreme Court precedent make one thing clear: there is no legitimate reason to strip Governor Cook of her office."
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