Today, Explained - Fed up

Episode Date: August 27, 2025

President Donald Trump wants to control interest rates. To do that, he needs to control the Federal Reserve. So he's turned to a toady to dig up dirt on Fed governor Lisa Cook. This episode was produced by Rebeca Ibarra and Devan Schwartz, edited by Amina Al-Sadi, fact-checked by Laura Bullard, engineered by Andrea Kristinsdottir and Patrick Boyd, and hosted by Noel King. Listen to Today, Explained ad-free by becoming a Vox Member: vox.com/members. Transcript at vox.com/today-explained-podcast. President Trump mocking Federal Reserve Chair Jerome Powell at a recent event. Photo by Andrew Harnik/Getty Images. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Taylor Swift and Travis Kelsey are engaged. But President Trump thinks interest rates are too high, so we have to do that instead. For months, the president has engaged in Fed-related criticism about the Reserve Chair Jerome Powell. He's a terrible Fed chair. I was surprised he was appointed. Trump actually appointed him to that job, you may recall. There's been criticism about the Fed doing an expensive building reno. We'd like to see it get finished, and in many ways it's too bad it started. And now Trump has trained his intermittent focus on Lisa Cook, a governor on the Fed's board.

Trump says he's going to fire her for committing mortgage fraud. She's saying, basically, bring it. You've heard all that, but who is the Trump appointee who went digging for dirt on Cook? That's ahead on today, Explain from Box. Megan Rapino here. This week, A Touchmore is live from Seattle to celebrate the unveiling of Sue's statue outside Climate Pledge Arena. And in honor of the special event, we're talking to Sue's former teammate, Storm Legend, and icon Lauren Jackson, plus current storm star Gabby Williams. Seattle is in the house. Let's go. Check out the latest episode of A Touchmore wherever you get your podcast and on YouTube. Can President Trump really broker peace between Russia and Ukraine?

I'm going to summon the Russian president to a summit. We're going to sit down. I'm going to lay out a ceasefire, and he's going to accept it. Maybe another president might have been able to pull that off. I doubt it. I'm Prit Bharara. In this week, the Atlantic's Tom Nichols joins me on my podcast. Stay tuned with Prit to discuss the Russia-Ukraine war, the viability of a ceasefire, and Trump's volatile foreign policy. The episode is out now. Search and follow. Stay tuned with Preet, wherever you get your podcasts. This is today explained.

I'm Noelle King with Matt Grossman. He's an economics reporter for the Wall Street Journal. Matt, who is Lisa Cook? Lisa Cook is one of seven governors on the board of the Federal Reserve. Thank you, Adam. And thank you to the Peterson-Inns. Institute for inviting me to speak today. This is my first speech as a Fed Governor, and I am delighted to deliver it here. She is an academic economist, which is a pretty common background for someone to have that position. She's only been on the board for two years, so she was just a little bit into the 14-year terms that the governor served. And she was nominated to that job by Joe Biden,

one of several people that during his presidency, he nominated and placed on the Fed's board. Cook is from the South. She grew up in Georgia. She was from a middle-class family. She had a number of academic passion. She first studied philosophy in college, went on to get a PhD in economics from Berkeley, and really spent most of her career in academia doing economic research. I was really interested in economic history, first internationally. She was very interested in the economic history of the Soviet Union. I wrote my dissertation on the Russian banking system and the Tsarist in post-Sovia period, as we said before, I lived there in 1995 and 1996 in Moscow. And as her career went on, became really interested, too, in the economic history of black Americans.

in the US. I looked at violence and economic activity. So what I looked at was African-American patentees to see what happened to them once riots, lynchings, and segregation laws were imposed on them. So that's why if I'm a block inventor in another city, why would I ever invent anything if I thought the intellectual property was never going to be defended. What is the Trump administration? What is Trump accusing Lisa Cook of having done?

Sure. So this first surfaced from a guy named Bill Pulte, who is the head of the federal housing finance agency. Pulte put on social media some documents that he says show that going back to 2021, before Cook was on the Fed Board, that she had applied for two mortgages on two separate properties about two weeks apart. And Pulte says that she said in those documents that each mortgage was for a primary residence. I don't know what cause is if that's not cause.

I mean, this lady, I don't understand how she can be in charge of setting interest rates for our country. And here she is potentially lying on her applications to get better interest rates. Like, you know, we have a huge economy. Why are we letting somebody like this do this? She needs to explain herself, but unfortunately, it's in black and white, and I don't think it's going away. And to be honest, I think she needs to resign quickly. Of course, the implication there is that you can't have both of these places be your primary residence. One of them is in Michigan, the other is in Georgia.

So the allegation from Pulte is that this was mortgage fraud, and this became, very quickly, a rationale for the Trump administration to move to fire Cook, or at least to try to, of course, long before any kind of criminal process has played out or even before charges have been filed or anything like that. All right. So as a result of this, President Trump says, I'm going to fire Lisa Cook for cause. Can he do that? It's a really good question.

This is an area of federal law that really has not been tested very much. When Congress created federal agencies, it designated some officials as having a really high standard for the president to remove them. This is often specified as for-cause protection, meaning that the president can't just fire you because he disagrees with your politics or he thinks you made a bad decision. The official had to have done something criminal or something that really constitutes malfeasance. The president has never tried to fire someone from the Fed board before, neither a Fed chair like Jerome Powell nor one of these governors who also is a high official within the Fed. Not only that, it's very rare for a president to have tried to fire anybody with this kind of for-cause protection in any part of the federal government. Of course, the way that these things usually become clear is that presidents try to do something, somebody challenges it in court. The court tries to reason out the law and figure out what it means.

We just haven't had much of that process here with this area of the law. So it's really an open question as to which way this goes. What is Lisa Cook saying about all of this? We haven't heard a lot from Cook since the allegations came up. She said that she's looking into what went on with her mortgage documents, first of all. She hired a powerful Washington attorney and has said that she thinks that this firing was illegal, that President Trump does not have the power to dismiss her, and that she's going to challenge it in a lawsuit. She hasn't filed that lawsuit yet as of early Wednesday morning here, but I think we expect that to come soon. Lisa Cook, of course, is a black economist who has done a lot of research on how racism affects the economic status of black Americans.

Americans. This is an administration that doesn't like that kind of talk, right? It views it under the category of like DEI. This is not what America is all about. Does Lisa Koch's background play any role in this attempt to oust her as far as you can tell? Yeah, that's a good question. And I think it's really hard to say. Of course, the Trump administration would say, you know, this is narrowly about this impropriety with her mortgage documents. You know, for the most part, besides Fed Chair Jerome Powell, the Fed governors operate in obscurity. I think most Americans wouldn't recognize them on the street or even know their names. And Cook especially didn't really do a lot to stand out as a governor in her two years. She didn't make as many speeches as some of her colleagues.

She tended to just kind of go with the flow in terms of voting on interest rates. So I would sort of be surprised if Donald Trump knew her name or knew who Lisa Cook was before these allegations surfaced. So if Lisa Cook does end up out of a job, where does that then leave the Fed? Well, Trump already has a really significant opportunity to reshape the Fed. Fed chair Jerome Powell, who Trump nominated to that job during his first term, his time as the Fed's chair expires in May. So that will give Trump the opportunity to pick a new face of the institution, a new person who really sets the tone for the whole central bank. He also right now has the chance to nominate another Fed board member because a Biden appointee, Adriana Coogler, resigned from her job earlier in August,

and Trump has already nominated a close advisor, Stephen Myron, to take that job. His Senate confirmation hearing will probably start next week. So if Cook is also out of a job, and again, we don't really know that yet, that would give Trump yet another opportunity to put someone, you know, who might be sympathetic with his policy views or someone who's sort of close to his administration potentially onto the Fed board. All right. So end game for President Trump is that we have a Trump Fed, and the Trump Fed does what Trump wants, and we are getting closer and closer to that.

What are the stakes for Americans here? Yeah. I think economists and investors are really anxious about this and think that it could be a huge setback for the American economy, for American financial markets if the Fed comes to be more under presidential control. The reason that Congress set up the Fed to be independent was that when you're setting interest rates, you sometimes have to make unpopular decisions in order to keep the economy on the right long-run path. A great example of this is the inflation that the economy saw in the 1970s, where inflation was running at really high levels for an extended period of time and had really become ingrained. And a Fed share who's now respected as one of the best to ever do it, Paul Volker,

had to raise interest rates to very uncomfortable levels in the early 1980s to put a stop to that. And there was a recession that followed, but it was the decision that had to be made to get the inflation. under control. Of course, recessions are always terrible for the political party that's in power. Voters hate it. They blame the president. And so no president ever wants to see that happen. And so when you have a Fed that's independent of the political process, it can make those unpopular decisions when the economy needs it. It could be a big setback if not only the economy loses that kind of referee, but also if investors, business people, and everyday Americans, lose the confidence that that sort of hand of God is there to guide the economy the way it ought to go.

That was Matt Grossman of the Wall Street Journal. Coming up, the henchman, the toady, the fan stooge. Many an adjective has been used. But who is this Bill Pulte? Support for the program today comes from Shopify when you're creating your own business, you have to juggle a lot of roles, marketing, sales, outreach, design, Shopify can simplify all of that. Shopify is the commerce platform behind millions of businesses around the world and according to company, 10% of all e-commerce in the U.S., from household names like

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Okay, shut it off, fellas. This is Today Explained. We're back. I'm Noelle King. When the news broke that President Trump planned to fire Lisa Cook, this little-known Trump administration official started tweeting. getting up a storm, about Lisa Cook, about mortgage fraud, about Lisa Cook's homes on Zillow. His name is Bill Pulte, and Vox's Andrew Procop takes it from there. Bill Pulte is the 37-year-old director of the Federal Housing Finance Agency.

And it's not an agency that tends to be at the forefront of the national conversation or the political discourse. You probably would not be able to name any other previous director of that agency. and yet he's been extremely successful at both inserting himself into political controversies. DEI is dead at Fannie Mae and Freddie Mac. And in dredging up accusations and political attacks against enemies of President Trump. And in President Trump's America, we're not going to have mortgage fraud. It doesn't matter who you are, whether you're a Republican or a Democrat. If you do mortgage fraud, we're going to come after you.

What does the FHFA do? So the FHFA is basically it oversees Fannie Mae and Freddie Mac, which are the government-backed companies that are crucial to the functioning of U.S. mortgage markets. So it's kind of like a big, important regulatory job. But that has not been Mr. Pulte's main focus since he was confirmed. We're going to talk about his main focus in a second, but let me ask you where he comes from. So Pulte is from a family that got very wealthy in the business of homebuilding. His grandfather, who's also named Bill, founded Pulte Group. It was one of the largest home building companies in the U.S.

When he got out of college, in the early 2010s, Bill founded a Michigan-based private equity fund that was focused on the housing industry, and then in 2019, that is when Bill Pulte first started to go viral. If at Real Donald Trump retweets this, I will give $30,000 to a veteran on Twitter. He started offering to give various of his Twitter followers free money. So I put out a tweet and I said, you know, if somebody can demonstrate to me how they'll use $10,000, I'll give away $10,000. He would offer them hundreds of dollars, thousands, even tens of thousands.

He called this Twitter philanthropy, and it made a pretty big splash at the time. He got a lot of media coverage in the mainstream media and the digital media. You're giving away a million dollars? I'm giving away a million dollars total on Twitter. Oh, you're doing it electronically, Bill. Well done. How does he come to the attention or bring himself to the attention of President Trump? So Twitter philanthropy, the novelty kind of wore off.

And Pulte, during the Biden presidency, Pulte started looking for new areas to kind of make a splash and grow his influence. And he started playing in the meme stock. He started like holding in-person events. You're missing, in my opinion, what people call the meme stock, which I call the retail investor. This is a movement. Just really trying to brand himself as a big, important finance influencer. But again, a niche character, not very important or seemingly very influential, but he gave some money to the right people. He gave $500,000 to a pro-Trump super PAC.

He gave some money to Turning Point USA, which is the young conservatives group that was founded by Charlie Kirk, who's a close ally of Donald Trump Jr., And so when Trump won again in 2024, suddenly Pulte was in the mix for a top administration appointment. It kind of came out of nowhere. He was talked about for Housing and Urban Development Secretary, but that didn't happen. And he got FHFA director instead. Okay, so he gets an appointment. It's not a sexy one, but it is an appointment. And like, weirdly enough, it allows him to look into Lisa Cook's mortgage.

And could he do that to anyone? It is not yet clear exactly what the process was for Bill Pulte deciding to dig into Lisa Cook's mortgage. But it is very unlikely a coincidence because it is playing out, again, amidst a broader campaign by Trump to gain control of the Board of Governors of the Federal Reserve. And Pulte has played a big part in that push. He has also been attacking Jerome Powell, arguing for lower interest rates, which Trump wants. And he's keeping these rates high for no reason. I think the only reason he's doing it is because he's political, contrary to what he says. And unfortunately, it's hurting a lot of Americans.

It's hurting a lot of people. He's been publicly criticizing Powell, urging him to resign and trying to drum up a pretext for that, too. Jay Powell is the number one impediment from his economy. economy becoming booming. And I hear that he's going to resign. I hear he's considering of resigning. He's been really arguing that the expensive renovation of the headquarters of the Fed is scandalous enough to merit Powell's firing for misconduct. But Powell hasn't been going anywhere. And then so if you're trying to get to a majority of the Federal Reserve Board of Governors to undercut him, Trump has already appointed two people. He has another appointee pending in the Senate. and he needs one more. So that is probably why the Eye of Sauron became trained on Lisa Cook.

Okay, so Pulte is the guy when, if you got somebody who needs some looking into, he can look into their mortgage. But you said he's looked into the mortgage records of other people. Who's he, who are we talking about here, Andrew? Well, Cook is the third person that Pulte has apparently targeted. He also went after two of the main Democrats who were involved in major investigations of Donald Trump, Adam Schiff from California, now a senator, who was the chairman of the House Intelligence Committee in Trump's first term, and Leticia James, the New York State Attorney General. He referred both of them to the Justice Department for possible prosecution, arguing that their mortgage documents showed misstatements. But it doesn't look good. It looks to a lot of people like he is using his position as the director of the federal housing finance agency to basically scrutinize Trump's enemies, to dig into their personal financial history, their mortgage history, what they submitted in mortgage applications, and look for anything that could be said to be mortgage fraud and get them prosecuted.

and locked up. He said that Fannie Mae's Financial Crimes Division concluded that Adam Schiff, Mr. Schiff, has engaged in a sustained pattern of possible mortgage fraud. And now there's a grand jury that is looking into Schiff for potential prosecution. This bogus latest attack, this bogus latest call for me to be prosecuted or to be jailed is not going to deter me. I'm going to continue to hold Donald Trump accountable for his criminal. corruption for his malfeasance, for the terrible harms he's doing to this country, you can count on it. And whether these cases will actually be filed remains to be seen.

There are reasons to think they might not be if the case looks weak. But Trump really does want to have his political enemies prosecuted. He's wanted this for a very long time. And so he and he's using this as leverage to try to both. get retribution and to push aside critics or people who are inconvenient to him politically. Unusually, the Justice Department prosecutor who is investigating Letitia James sent a letter saying that, you know, if you resigned as Attorney General of New York, maybe this investigation would go away. We take that as good faith.

So it seems transparently political. The catch is that mortgage fraud is a pretty powerful avenue for prosecution. This has long been something we've seen in kind of complex federal prosecutors. People who've watched the wire may remember that this was referred to as the headshot when they were investigating state senator Clay Davis in Baltimore. I mean, this is some shameful shit. Amid all of this, it's important to remember that this is not normal. administrations typically do not seek retribution in this way.

You've been covering these folks for now a full, how long has it been, Andrew, 10 years, eight months? What are we seeing in terms of the Trump administration and its kind of quest to remove people who it doesn't like? Well, they're very serious about it. And, you know, this connects to the raid on John Bolton. Trump has been a lot more successful at getting people who are less concerned about norms of restraint, about process, about not looking political. And so we've really seen these norms and constraints more and more falling away in a way that is quite concerning, and we're probably still at the very early stages of it.

And who knows how many of these will hold up? There are many steps in the process where charges like this could fall apart. They could fail to get grand jury approval. They could be thrown out by a judge. They could be rejected by a jury. They could be rejected after conviction on appeal. We're still a long way from Trump actually managing to get his enemies locked up. But what he is doing is weaponizing government more and more, including parts of government you wouldn't necessarily expect, like the Federal Housing Finance Agency, to dig up dirt on his enemies, to push aside critics, to seize more power for himself, and to threaten people with very serious consequences if they don't do what he wants.

Vox's Andrew Procop. Rebecca Ibarra and Devin Schwartz produced today's show. Amina El Sadi edited. Laura Bullard, senior researcher, fan, Stoge. Patrick Boyd and Andrea Kristen's daughter are here. I'm Noelle King. It's today explained. Thank you.