WSJ What’s News - Trump Considers Firing Fed Official After Allegation of Mortgage Fraud

Episode Date: August 20, 2025

P.M. Edition for Aug. 20. The president called on Federal Reserve governor Lisa Cook to resign after a housing official alleged she submitted what he called fraudulent information. Economics reporter Matt Grossman discusses how the accusations represent the latest escalation of the White House’s attacks on the central bank. And Wall Street editor Cara Lombardo reports on the billionaire Bill Ackman’s new pet project—the Alpha School makes full use of artificial intelligence while rejecting lessons on diversity, equity and inclusion. Plus, the previously undisclosed North Korean site that could store long-range ballistic missiles capable of striking the U.S. mainland. Pierre Bienaimé hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

I'm Chris Hadfield, astronaut and citizen of planet Earth. Join me on a journey into the systems that power the world. No politics, just real conversations with real people shaping the future of energy. Listen wherever you get your podcasts. President Trump considers firing a Biden-appointed Federal Reserve Governor for alleged mortgage fraud. Plus, the Alpha School that has become billionaire Bill Ackman's new pet project. The two hours of AI-powered learning in the morning is all focused on the core subjects that you tend to think of when you think of school. But one thing that you will not find are lessons on diversity, equity, and inclusion.

And demand for freight tracking services grows to tackle a rise in cargo theft. It's Wednesday, August 20th. I'm Pierre Biennamee for the Wall Street Journal, sitting in for Alex Oslo. This is the PM edition of What's News, the top headlines and business stories that moved the world today. President Trump has told aides he is considering firing a Biden-appointed Federal Reserve governor after one of his housing officials accused her of mortgage fraud. That's according to a senior White House official and another person familiar with a matter. Bill Pulte, the head of the Federal Housing Finance Agency,

alleged on social media today that Fed Governor Lisa Cook submitted what he called fraudulent information on a pair of mortgage applications. In response to Pulte's claims, Trump wrote in a social media post that, quote, Cook must resign now. According to the White House official and person familiar with the matter, the president is discussing how to fire Cook for cause if she doesn't resign. A spokesman for the Fed's board of governors said he had no immediate comment. Matt Grossman covers economics for the Wall Street Journal.

Matt, what are the allegations against Cook? When you submit a mortgage application, you have to designate whether the property is a primary residence or not. And if it is, it could give you a lower interest rate or things like. that. The accusation from this federal official is that Governor Lisa Cook at the Federal Reserve, 14 days apart, said that two different properties were her primary residence as she was applying for mortgages. In the social media post from Bill Pulte, we get images of her signatures, but no context of the rest of the mortgage application. So there's not really much evidence here besides the allegation that Bill Pulte is made. As the head of the FHFA, one of Bill Pulte is made, as the head of the FHFA, one of Bill Pulte's main responsibilities is overseeing Fannie Mae and Freddie Mac, the housing finance agencies. It doesn't have a lot to do with the Federal Reserve. From his seat, Pulte has criticized the Fed for keeping interest rates high. He says that that has made mortgage rates higher than

they might otherwise be. And it seems like Pulte was using his position in the FHFA to maybe gain access to some of these mortgage documents that he says show that Lisa Cook have committed mortgage fraud. Another Fed governor resigned earlier this month. Would a new opening here give President Trump an opportunity to further shape the central bank? In August, Adriana Kugler resigned. She was also like Lisa Cook, a governor who was appointed by President Biden during his administration. So if this should result in another opening, it would give Trump a second opportunity to replace a Biden appointed governor with someone of his choice. Of course, it's far from clear whether Lisa Cook is going to resign or whether Trump has the power to fire her if he wants. That's a matter

of some controversy. What's Trump's vision for the Federal Reserve? This year so far, Trump has really been preoccupied with lower interest rates. He's been very frustrated at Fed Chair Jerome Powell for holding interest rates steady since January. He and his advisors have been calling not just for a rate cut, but for really a series of substantial rate cuts. The Fed's an institution that for decades has been understood to be really independent from the executive branch. So presidents have certainly complained about it before, but the scale and the duration of Trump's all-out attack on a lot of different fronts on the Fed is really without a recent precedent. Matt Grossman covers economics for the Wall Street Journal. Matt, thanks so much. Thank you. Meanwhile, according to the minutes of

the Fed's policy meeting released today, the central bank's decision to hold interest rates steady last month was broadly supported despite two officials who dissented in favor of a cut. While officials worried over the prospect of weaker employment at the meeting, a majority of them thought the risk of higher inflation was greater. Since that meeting, economic data have strengthened the argument of so-called doves who favor rate cuts because job growth in May and June was revised lower. Some officials have indicated they are open to cutting rates at the next meeting in September. A sell-off in tech stocks extended into a second day today, with a NASDAQ losing about 0.7%. The S&P 500 fell about a quarter percentage point, and the Dow ended nearly flat, inching a fraction of a percent higher.

Several big U.S. retailers report quarterly earnings this week, offering a glimpse into the spending habits of consumers and the effects of President Trump's trade war. Home Depot reported a rise in San Francisco. store comparable sales yesterday. Today, Lowe's reported it boosted its annual outlook and said it would buy the distributor foundation building materials for $8.8 billion. The home improvement chain's quarterly adjusted earnings and revenue beat expectations. Target posted its 11th straight quarter of flat or falling sales and named Michael Fidelge, a lifelong employee, to steer its turnaround as chief executive starting in February. The owner of T.J. Max boosted its annual profit outlook. TJX logged higher than expected quarterly results

as consumers flocked to its discount stores in search of deals. Walmart is due to report tomorrow morning. The retail Goliath was one of the biggest companies to say earlier this year it would pass tariff costs onto consumers and raise prices. We exclusively report that North Korea has a secret, fortified base that could house its newest long-range ballistic missiles, which may be capable of striking the U.S. mainland. That's according to a new report,

by the Center for Strategic and International Studies, a Washington, D.C. based think tank. The report says the base, about 17 miles from the Chinese border, appears capable of storing six to nine of North Korea's advanced intercontinental ballistic missiles, the launch vehicle is required to wheel them into position, and the thousands of troops needed for operations. Coming up, we take a look at a private school where DEI is out and AI speed teaching is in. That's after the break. Td Bank knows that running a small business is a journey, from startup to growing and managing your business.

That's why they have a dedicated small business advice hub on their website to provide tips and insights on business banking to entrepreneurs. No matter the stage of business you're in, visit td.com slash small business advice to find out more or to match with a TD small business banking account manager. The Bill Ghaner Bill Ackman has a new fascination. Alpha School, a fast-growing private school that skips lessons on diversity, equity, and inclusion. Ackman, who runs the investment firm Pershing Square, is an outspoken critic of DEI programs.

Kara Lombardo is Wall Street editor for the journal. Kara, Alpha has locations in Texas, Florida, and California. It's opening a school in downtown Manhattan next month. But what is Alpha School? their whole pitch is you know what the days of a teacher standing in front of the classroom for six hours a day seven hours a day and speaking at kids that should be over we're going to condense all of that into a two-hour AI powered computer exercise and then after that kids can do whatever their passion is for the rest of the day and who will the teachers be AI aside that's also something

that they're turning on its head they don't have teachers first of all they call the teachers guides and these are typically people that come from a variety of backgrounds, most of them not traditional teaching degrees. And what's in the curriculum here? The two hours of AI-powered learning in the morning is all focused on the core subjects that you tend to think of when you think of school. But one thing that you will not find are lessons on diversity, equity, and inclusion. The school says it likes to just stay out of politics entirely and tries to keep those hot-button

issues out of the classroom. That in particular is attracting people like Ackman. He's been an outspoken critic of DEI programs, and when he heard that things like the gender continuum would not be covered at this school, he liked the sound of that. What's Ackman's relationship with Alpha School exactly? We've been hearing from people in Ackman's social circles that he's been hyping up Alpha School and encouraging other parents to take a look at it, get involved, see if it might be something of interest. So he's acting as something of an ambassador for the school. He's gone so far as to bring a set of parents down to its Texas location to show them how it works. He's been talking it up in social gatherings, and he's even on Friday going to be interviewing the co-founder and the principal of Alpha School at an event at his Hampton's home.

Kara, we've seen anti-DI concern in higher ed and at U.S. companies. Is this a notable example, Alpha School, of it spilling into kids' education, too? A lot of grade schools in the city have already been grappling with this over the past couple of years. There was a backlash, especially from the very wealthy parents against some of these DEI programs. Places like Horace Mann where Bill Ackman already sits on the board of trustees have already watered down these curriculums. But this is a prime example of a school just saying we're going to leave all of that out entirely. How has Ackman himself been in that arena? Acman really rose to fame, particularly on social media, back when in the wake of the October 7th attack on Israel,

he was criticizing universities, especially Harvard, over their handling. of protests. And ultimately, his incessant tweeting on the topic was seen as part of the reason that the president eventually resigned. Kara Lamberto is a Wall Street editor for the Wall Street Journal. Kara, thanks so much. Thank you. Supply chain company Overhaul has raised $105 million in Series C funding as it seeks to seize the growing demand for freight tracking services, including to combat cargo theft. Liz Young covers logistics for the Wall Street Journal, and she joins me now. Liz, what's Overhaul looking to do with this new funding?

Overhaul is looking to use this funding to invest in artificial intelligence technology and make additional acquisitions. So the company this week acquired another supply chain visibility company called Freight Verify, and Overhaul says that they want to make more deals like that. And some examples of what Overhaul says that it's able to do is track when a door is open that shouldn't be opened, or a truck driver is going in the wrong direction and is off route. Overhaul says that it works with companies to set them up with tracking devices that link to the Overhaul platform and then allow Overhaul to monitor shipments in real time. In concept, Overhaul wants to go beyond basic location tracking to offer shippers insight into

what's happening with their goods. So that can include Overhaul running security centers that monitor shipments and intervene if a truckload goes missing, for example. And then they will involve law enforcement. as needed. Just how big of a problem is cargo theft? Overhaul said that in June, it provided real-time location data and photos of a tractor and a trailer to law enforcement after a $1.6 million shipment of electronics was stolen in Texas. Overhaul says that it was its information that it provided to law enforcement that helped lead to the recovery of that shipment. Cargo theft has been a

growing problem over recent years. Just in the most recent period for the second quarter of this year, more than 880 cargo thefts were reported across the U.S. and Canada, and that was up 13% from the same period last year. That's according to risk assessment from various cargo net. So more and more companies have been getting into this freight tracking visibility space over the past couple of decades, really. Some of the others in the space include Project 44 and four kites, and there are other companies that have focused on the device manufacturing side of things, making tiny tracking tags that these companies can use to help trace shipments. covers logistics and the supply chain for the Wall Street Journal.

Liz, thanks so much. Thank you. And that's what's news for this Wednesday afternoon. Today's show was produced by Charlotte Gardenberg and Anthony Bansy, with supervising producer Michael Cosmides. I'm Pierre Bien-Met for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.