The US Federal Reserve responded to Trump's attempt to fire one of the regulator's governors

The US Federal Reserve said it would honor any court ruling against President Donald Trump's attempt to fire Fed Board of Governors member Lisa Cook. But, the regulator noted, it is confident that the court will uphold her right to continue to fulfill her duties, CNBC quoted a Fed spokesman as saying.

The U.S. Federal Reserve has issued its first statement through its spokesperson after Donald Trump's decision to fire one of its governors, Lisa Cook. On Monday, August 25, the head of the White House announced that he was removing Cook from her position, citing irregularities she allegedly committed in the execution of mortgage documents. She herself denied the accusations, said she would challenge the decision in court, and until then - will continue to work.

"Congress, through the Federal Reserve Act, mandates that Governors are appointed for long fixed terms and can only be removed by the President 'for cause,'" the Fed said in a statement, "Long terms of office and protection from arbitrary dismissal serve as a vital safeguard, ensuring that monetary policy decisions are based on data, economic analysis, and the long-term interests of the American people. The Federal Reserve will continue to fulfill its responsibilities under the law."

Trump also told reporters Tuesday that he would abide by any court ruling on Cook's fate at the Fed. According to a Bloomberg source, the White House does not yet plan to conduct additional vetting and interviews to fill Cook's seat on the board of governors. The plan is to continue the process of selecting a successor to Fed chief Jerome Powell and then decide whether any of the remaining candidates are suitable for other vacancies, the source said.

The court is likely to side with Cook, said Mikhail Denislamov, deputy director of Freedom Capital Markets Research. If the verdict is not in her favor, Trump will get more loyal votes in the Fed leadership and will be able to more actively influence its decisions. In this case, volatility in the markets will increase, Denislamov predicts.

At Tuesday's Cabinet meeting, the president said he would soon "get a majority" on the Federal Reserve Board, and the governors he appoints will work to lower interest rates.

At the beginning of trading on Tuesday, August 26, the main U.S. indices were slightly declining, but during the day turned to growth. After the publication of the US Fed statement, the S&P 500 and Nasdaq Composite rose by 0.2%, while the Dow Jones was up about 0.1%.

"In the short term, markets will probably get over the Cook news pretty quickly (assuming it remains an isolated episode and Trump doesn't try to fire Powell), shifting attention back to [the upcoming report from] Nvidia, the PCE index and the labor market, but the Fed's independence is undeniably being undermined - a process with negative long-term consequences," Vital Knowledge founder Adam Crisafulli told CNBC.

This article was AI-translated and verified by a human editor