In a move that has sent ripples through Washington and the financial world, the U.S. Justice Department has opened a criminal mortgage fraud investigation into Federal Reserve Governor Lisa Cook, a prominent economist whose tenure at the nation’s central bank has broken barriers and ignited controversy. The probe, which became public in early September 2025, marks an extraordinary escalation in tensions between President Donald Trump and the Federal Reserve, raising urgent questions about the independence of one of America’s most important financial institutions.
According to reporting from Reuters and The Wall Street Journal, the Justice Department’s investigation is being spearheaded by Ed Martin, a department official and well-known Trump loyalist. Martin was appointed by Attorney General Pam Bondi to lead probes into potential mortgage fraud by public officials after his unsuccessful bid to become U.S. attorney for the District of Columbia—a nomination scuttled in part by opposition from North Carolina Senator Thom Tillis, who cited Martin’s support for defendants involved in the January 6, 2021 Capitol attack.
The probe into Cook comes on the heels of a similar investigation into New York Attorney General Letitia James, who previously led a civil real estate fraud case against Trump and members of his family. The parallel timing has fueled accusations from critics that the Justice Department is being wielded as a political weapon by the Trump administration.
President Trump’s campaign to remove Lisa Cook from the Federal Reserve Board has been both public and relentless. In late August, Trump posted on Truth Social that he was firing Cook, claiming to have evidence that she made false statements on mortgage applications. Cook responded by filing a federal lawsuit, arguing that the president lacks the authority to remove a sitting Fed Governor. That legal battle remains unresolved as the criminal investigation unfolds.
Cook’s attorney, Abbe David Lowell, issued a forceful statement in response to the DOJ’s actions, saying, “Predictably and recognizing the flaws in challenging their illegal firing of Governor Cook, the administration is scrambling to invent new justifications for its overreach. This Justice Department – perhaps the most politicized in American history – will do whatever President Trump demands. He wants cover, and they are providing it.” Lowell also pushed back on the substance of the allegations, stating that Cook and her legal team “have begun addressing questions about how she described her properties in the pending case and will continue to do so. Those descriptions are not fraud, but it takes nothing for this DOJ to undertake a new politicized investigation, and they appear to have just done it again.”
The stakes of this confrontation go far beyond the fate of one official. Never before in the Federal Reserve’s 111-year history has a sitting president attempted to remove a Board Governor, a fact that has alarmed economists across the ideological spectrum. More than 500 economists have signed statements warning that such a move would imperil the fundamental principle of central bank independence, which they argue is essential to maintaining trust in the U.S. economy and its global leadership.
As reported by Public Notice, the controversy over Lisa Cook’s position is deeply intertwined with President Trump’s push for lower interest rates. Trump has made no secret of his desire for rate cuts, and many observers see Cook—who is widely respected for her expertise and independent judgment—as an obstacle to that goal. The prospect of replacing her with a more pliant nominee, critics argue, would erode the Fed’s ability to act in the nation’s best economic interest rather than at the whim of the White House.
For Cook herself, the scrutiny is both professional and personal. She is one of the most prominent Black women in economics, with a career that spans top academic appointments and high-level policy work. A graduate of Spelman College with high honors, a Marshall Scholar at Oxford, and a PhD from UC Berkeley, Cook has served as a professor at Michigan State University, worked in the U.S. Treasury and White House, and held positions at four of the Federal Reserve’s 12 regional banks. Her research has focused on innovation, inequality, and more recently, the economic implications of artificial intelligence—an area she has urged the Fed to take seriously.
The attacks on Cook have revived longstanding concerns about racism and sexism in the economics profession. According to a 2024 report by the Committee on the Status of Minority Groups in the Economics Profession, only four Black women earned doctoral degrees in economics out of 1,385 recipients—a stark illustration of the field’s ongoing diversity challenges. Cook’s nomination to the Fed Board in 2022 was met with harsh criticism and, as her colleagues and supporters note, outright harassment rooted in bigotry.
As one Black woman economist and close friend of Cook wrote in Public Notice, “Her existence among the most lauded economists in the world comes against a narrow view of who economic leaders can be and who the economy can serve. Her presence on the Fed Board serves as a powerful reminder that America and Americans are not a monolith, nor should they be.” This same author argued that removing Cook would allow “Trump’s ego” to shape the economy, rather than reliable expertise, and warned of the societal costs of mistreating Black women in leadership.
Former Treasury Secretary Larry Summers, speaking on September 6, 2025, added another dimension to the crisis, warning that the Federal Reserve is on the verge of a “credibility crisis” amid these escalating tensions. Summers, who has been outspoken about the dangers of politicizing the central bank, also described Trump’s foreign policy as making the world “more dangerous,” underscoring the wider stakes for both domestic and international stability.
As the legal and political battles grind on, the outcome remains uncertain. The Justice Department has so far declined to comment on the ongoing investigation. Meanwhile, Cook’s lawsuit challenging her removal is pending, and the chorus of voices defending her—and the Fed’s independence—continues to grow.
In the end, the fight over Lisa Cook’s future is about much more than one official or even one institution. It is a test of whether the United States can maintain the independence of its central bank in the face of unprecedented political pressure, and whether the nation’s leaders will heed the warnings of those who see this moment as a crossroads for democracy, expertise, and equality in public life.
