Washington Edition

This is Washington Edition, the newsletter about money, power and politics in the nation’s capital. Today, senior editor Joe Sobczyk looks at the Trump administration’s latest salvo at the Federal Reserve. Sign up here and follow us at @bpolitics. Email our editors here.

New Target

President Donald Trump has opened another front in his campaign to bend the Federal Reserve to his will.

Trump today called on Fed Governor Lisa Cook to resign over allegations, surfaced by a staunch Trump ally at the Federal Housing Finance Agency, that she may have given false information in applying for two mortgages.

FHFA Director Bill Pulte made the allegations in a letter to the Justice Department, as Bloomberg News’ Josh Wingrove reported last night. No charges have been filed and it’s not clear yet whether they will be. The Justice Department declined to comment. The Fed also declined to comment and Cook didn’t respond to requests for a response.

Lisa Cook Photographer: Ting Shen/Bloomberg

The president has been pressuring the central bank to lower its benchmark interest rate and until now has mostly focused his ire on Fed Chair Jerome Powell. He’s relentlessly derided Powell in social media posts and criticized him for the cost of renovations at Fed headquarters.

But he’s backed off from musing about firing the Fed chief. Now he’s turned his attention to Cook, the first Black woman to serve as a Fed governor, though he’s not threatened to fire her, so far. The Federal Reserve Act requires cause for the president to remove a member of the Board of Governors.

If Trump is able to replace Cook, whose term isn’t scheduled to expire until 2038, his appointees would have a 4-3 majority on the Fed’s governing board, though not on the 12-member Federal Open Market Committee that sets rates.

More: Fed Found Over 22,000 Mortgages Like Those Pulte Is Now Flagging

Allegations of mortgage fraud by Pulte also have figured into Justice Department investigations into two Democrats who are longtime Trump foes: California Senator Adam Schiff, who led the first impeachment proceedings against Trump, and New York Attorney General Letitia James, who won a $454 million judgment against Trump and his companies last year. Both have vigorously denied the allegations.

Trump’s broadsides against the Fed have raised fears about its independence among central bankers around the world, many of whom are gathering in Jackson Hole, Wyoming, this week for the Fed’s annual economic policy symposium. Powell, who addresses the conference on Friday, is expected to get a show of support from his counterparts. — Joe Sobczyk

Don’t Miss

Most Federal Reserve officials highlighted inflation risks as outweighing concerns over the labor market at their meeting last month, as tariffs fueled a growing divide within the central bank’s rate-setting committee.

Trump has bought at least $103.7 million in bonds since he returned to office, including those sold by US companies affected by the sweeping changes to federal policies he’s championed.

The Trump administration is pushing back on criticism that the surge of law enforcement and National Guard troops to Washington has focused on relatively affluent or tourist-intensive areas of the nation’s capital.

Law enforcement officers near the Capitol Photographer: Kayla Bartkowski/Bloomberg

A group of current and former staff at the Department of Health and Human Services are blaming Secretary Robert F. Kennedy Jr. for spreading misinformation that led to a deadly shooting at the CDC.

A federal judge has denied the Justice Department’s request to release the transcript of the grand jury proceedings that led to Jeffrey Epstein’s indictment for sex trafficking in 2019.

The White House has launched its own TikTok account, the latest signal of support as Trump continues to seek a sale of the social video app’s US operations from Chinese company ByteDance.

Tyler and Cameron Winklevoss, the twins who run the Gemini cryptocurrency exchange, said they’ve donated $21 million in Bitcoin to a political action committee to promote Trump’s pro-digital asset agenda.

Watch & Listen

Today on Bloomberg Television’s Balance of Power early edition at 1 p.m., hosts Tyler Kendall and Mike Shepard interviewed Kay Bailey Hutchison, former US ambassador to NATO, about how the alliance can provide security guarantees for Ukraine.

On the program at 5 p.m., they talk with Wally Adeyemo, former deputy Treasury secretary, about Trump’s pressure on the Fed and the central bank’s independence.

On the Trumponomics podcast, host Stephanie Flanders, Bloomberg’s head of government and economics, speaks with journalist and author Ben Chu about his latest book, “Exile Economics: What Happens if Globalisation Fails” and what that actually would look like — not in theory, but in the messy, interconnected reality of the 21st century. Listen on Apple Podcasts, Spotify or wherever you get your podcasts.

Chart of the Day

Trade uncertainty and new tariffs may have increased the amount of debt held by many businesses this year. An analysis by LexisNexis Risk Solutions found that industries deemed to be most affected by tariffs are among sectors that have increased their debt loads the most this year. The average revolving balance on business credit cards and lines of credit increased by 5.9% among construction firms and 5.5% for trucking and warehousing firms, likely due to stockpiling inventories before the tariffs kicked in, according to Kristin Carlson-Vinjamuri at LexixNexis. Stocking up hit helped cushion the blow of the levies because firms had inventory on hand purchased at pre-tariff prices, but it remains to be seen how quickly they’ll be able to pay down the added debt. — Alex Tanzi

What’s Next

Existing home sales in July are set to be reported tomorrow.

Initial and continuing unemployment claims for the week ending Aug. 16 also will be released tomorrow.

The Conference Board’s Leading Economic Index is released tomorrow.

The Kansas City Fed’s annual economic symposium in Jackson Hole begins tomorrow.

Preliminary data on durable goods orders will be reported Aug. 26.

The Conference Board’s reading of consumer confidence will be released Aug 26.

The House and Senate are on break until Sept. 2.

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