This week, Bill Pulte, head of the Trump administration’s Federal Housing Finance Agency (FHFA), made headlines — and shook markets — when he alleged that Federal Reserve Gov. Lisa Cook claimed two primary residences on a mortgage application and called for her resignation and investigation by the Department of Justice.
“I am gathering the accurate information to answer any legitimate questions and provide the facts,” Cook said in response, but added that she had “no intention of being bullied to step down from my position because of some questions raised in a tweet.”
Trump and Pulte’s actions aren’t just bizarre distractions. The harm here is real.
The director of the FHFA — tasked with overseeing Fannie Mae and Freddie Mac and keeping the housing finance market stable — should be focused on making mortgages accessible and affordable for American families. Instead, Pulte has spent his tenure lashing out at Fed Chair Jerome Powell, and weaponizing the agency he runs against the president’s political opponents in what The Wall Street Journal editorial board calls “an ominous turn in political lawfare” and “an ugly way for government regulators to behave.”
For months, President Donald Trump and Pulte have pressured the Fed to slash interest rates, hoping to juice an economy weakened by the president’s own mismanagement. While Powell signaled this week that the dramatic slowdown in hiring over the past few months “may warrant” reducing rates, rising inflation caused by the administration’s own chaotic tariff policy continues to be a “challenging situation.”
When other economic officials — from the Bureau of Labor Statistics to the Federal Trade Commission and the National Labor Relations Board — refused to bend to political pressure, Trump simply fired them. But a recent decision from the Supreme Court’s conservative majority suggested that members of the Fed’s board have greater protections from firings than officials from those other agencies. Instead, Trump has tried to scare Powell and Cook into resignation with the threat of criminal prosecution.
This is a frightening time for American democracy, and for the American economy.
Whether through dismissals or pressure campaigns, the politicization of the institutions tasked with measuring and managing the economy will erode trust in American governance and markets. The Fed, in particular, draws its power to manage interest rates and inflation in part from trust: If investors and consumers begin to believe that the Fed will allow inflation to get out of control, these expectations can become a self-fulfilling prophecy, and interest rates will jump in response. If investors across the world no longer see the U.S. as the safest bet for their money, borrowing costs for the government, businesses and consumers will rise.
By focusing on the Fed, Trump and his team hope to distract from their disastrous economic agenda. Trump and Pulte should be working to make housing more affordable, but instead they are driving prices skyward while proposing deep cuts to affordable housing programs. “High home prices and elevated interest rates reduced homebuying to its lowest level since the mid-1990s,” reports Harvard’s Joint Center for Housing Studies. And instead of fulfilling his promise to lower costs for families on Day 1, Trump is driving up prices for everything from housing to groceries to electricity, while slashing health care and food assistance.
Trump’s and Pulte’s actions aren’t just bizarre distractions. The harm here is real. The administration’s attacks on Powell and Cook put America’s entire economic foundation at risk — undermining global confidence, driving up costs for families and businesses and leaving lasting damage. They also send a chilling message: This administration is willing to use law enforcement to intimidate and punish anyone who doesn’t bend to its will, no matter what the consequences for ordinary Americans.