The U.S. Supreme Court ruled narrowly on Monday to block President Donald Trump from being able to immediately fire Federal Reserve (Fed) Governor Lisa Cook over mortgage fraud allegations, in what is seen as a blow to his expansive view of presidential powers.

In a 5-4 ruling, the court said that the president cannot remove officials at the independent Fed "for any reason or no reason."

The U.S. central bank is a non-partisan institution that makes monetary policy for the world's largest economy, with governors appointed by the president after a Senate confirmation process.

Trump has exerted unprecedented pressure on the Fed to lower interest rates to boost economic activity, and his attempt to fire Cook was the first time a president had tried such a move in the bank's 111-year history.

U.S. presidents are allowed to fire Fed governors "for cause," but the court ruled that Trump "failed to afford Cook the procedural protections to which she was entitled by statute."

This provided a safeguard for the Fed specifically, even as it boosted the president's power over government in a separate landmark ruling on Monday.

In that ruling, involving Trump's dismissal of a Federal Trade Commission (FTC) member, the court expanded presidential authority to fire leaders of other U.S. agencies, overturning a precedent dating to 1935 in the process.

'Refused to bow'

Conservative Chief Justice John Roberts, who authored the ruling, said Trump had "failed to afford Cook the procedural protections to which she was entitled by statute.

Without such protections, she could not properly dispute the charges the president laid against her."

Trump last August cited unproven mortgage fraud allegations in trying to oust Cook, the first Black woman to serve as a Fed governor. Cook denied the allegations, calling them a pretext to remove her for monetary policy differences.

Cook welcomed the court's decision, saying it affirms the Fed's obligation to make policy decisions independently, free from political interference.

"This was never about mortgage documents signed years before I became a Federal Reserve governor. It was an attempt to remove me on a manufactured pretext because I refused to bow to political pressure and continued to set interest rates based only on what would best serve the American people," Cook said.

The court said its ruling was not deciding the validity of the factual dispute in the case, which can now return to lower courts where action has been stalled while the Supreme Court weighed in.

"It at least remains an open question what precisely happened here, and indeed whether Cook committed 'gross negligence,' let alone 'deceitful and potentially criminal conduct,' as the president's letter alleges," Roberts wrote, adding that Cook must be able to respond to the charges made against her.

'Appropriate action'

Trump reacted to the decision in a social media post.

"The Cook Lawsuit, having to do with her suitability in sitting on the Board of the Federal Reserve, was sent back by the Supreme Court on a strictly procedural basis, we will take appropriate action immediately to make sure that someone who has committed wrongdoing will not be making vital decisions concerning the Welfare of the United States of America!" Trump wrote.

Trump's targeting of Cook and a separate criminal investigation his administration launched in January, but later dropped, against then-Fed Chair Jerome Powell together represented the biggest challenge to the central bank's independence since its founding.

In its ⁠separate 6-3 ruling ⁠powered by the conservative justices, the Supreme Court backed Trump's firing of Democratic Federal Trade Commission member Rebecca Slaughter. Trump called that ruling "one of the most important ever given with respect to Presidential Powers."

The court overturned its pivotal decision in a case called Humphrey's Executor v. United States that rebuffed Democratic President Franklin Roosevelt's attempt to fire an FTC member over policy differences.

Monday's rulings follow the court's Feb. 20 decision in another case with major economic ramifications to strike down most of Trump's sweeping global tariffs.

The power of the Fed

The Fed is the world's most important central bank, an institution that determines the cost of credit for the U.S. and beyond and which has been in Trump's crosshairs since his return to the presidency in January 2025.

As a Fed governor, Cook helps set U.S. monetary policy with the rest of the central bank's seven-member board and the heads of the 12 regional Fed banks.

She was appointed by Democratic former President Joe Biden in 2022. May 15 was the final day of Powell's eight years as Fed chair, though he remains a member of its Board of Governors.

The U.S. Senate on May 13 voted to confirm Trump's nominee Kevin Warsh as Powell's successor, and he was sworn in on May 22.

When the justices in October agreed to hear the case involving Cook, they left her in the post for the time being. In contrast, they let Trump remove Slaughter last year.

Trump has heaped pressure on the central bank to cut interest rates more rapidly and more deeply than it has been willing to do as it combats persistent inflation, and lashed out repeatedly at Powell for not complying with his wishes.