President Donald Trump called on Federal Reserve governor Lisa Cook to resign after Bill Pulte, director of the agency overseeing Fannie Mae and Freddie Mac, urged the Justice Department to investigate Cook for allegedly claiming two homes as principal residences to obtain better mortgage lending terms. Cook was appointed to the Fed board in 2022 and reappointed in 2023 to a term lasting until 2038. The allegation intensifies administration pressure on the Fed amid Trump's demand for lower short-term interest rates, which currently stand around 4.3%, and his stated aim to reduce government borrowing costs and lower mortgage rates. The Federal Reserve declined to comment.
The allegation represents another front in the Trump administration's attack on the Fed, which has yet to cut its key interest rate as Trump has demanded. If Cook were to step down, then the White House could nominate a replacement. And Trump has said he would only appoint people who would support lower rates. The Federal Reserve declined to comment on the accusation.
Trump has for months demanded that the Federal Reserve reduce the short-term interest rate it controls, which currently stands at about 4.3%. Trump says that a lower rate would reduce the government's borrowing costs on $37 trillion in debt and boost the housing market by reducing mortgage rates. Yet mortgage borrowing costs do not always follow the Fed's rate decisions.
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