The US Supreme Court has blocked President Donald Trump’s attempt to remove Federal Reserve Governor Lisa Cook, ruling that the administration failed to provide her with the legal due process required before seeking her dismissal.
In a 5-4 decision, the court said the White House had not given Cook an adequate opportunity to contest allegations of mortgage fraud before attempting to remove her from the Federal Reserve Board. The ruling is widely viewed as reinforcing the legal protections designed to preserve the US central bank’s independence from political influence.
The case will now return to lower courts, where the Trump administration must substantiate its allegations if it intends to proceed with Cook’s removal. Cook will also have the opportunity to challenge the claims in court.
According to reports from the BBC, under US law, members of the Federal Reserve Board can only be removed by the president “for cause”—a safeguard established by Congress to protect monetary policy decisions from political pressure and ensure the central bank can pursue long-term economic stability.
Trump announced plans to dismiss Cook in August, alleging that she improperly claimed two separate properties as her primary residence on mortgage documents. Such designations can affect mortgage interest rates. Cook has denied any wrongdoing.
Her attorney, Paul Clement, argued before the Supreme Court that the administration’s approach undermined Congress’ intent to shield the Federal Reserve from political interference.
Representing the administration, Solicitor General John Sauer argued that Trump’s public announcement on social media provided sufficient notice and that the alleged misconduct, even if unintentional, constituted negligence that could damage public confidence in the central bank.
Following the ruling, Cook rejected the allegations, describing them as “a manufactured pretext” intended to pressure her over monetary policy.
“The case was never about mortgage documents,” Cook said in a statement, adding that Federal Reserve officials must make policy decisions based on “independent judgment, free from political interference.”
The decision is expected to reassure financial markets by preserving longstanding legal protections for the Federal Reserve’s independence, a principle widely regarded as critical to maintaining investor confidence, controlling inflation and ensuring credible monetary policy.
Supreme Court Expands Presidential Power Over Other Independent Agencies
While the ruling protected the Federal Reserve from immediate White House intervention, the Supreme Court issued a separate decision on the same day that significantly expanded presidential authority over other independent federal agencies.
In a 6-3 ruling authored by Chief Justice John Roberts, the court held that presidents may remove members of independent regulatory agencies at will, overturning nearly 90 years of legal precedent established by the 1935 Humphrey’s Executor decision.
The judgment weakens employment protections for officials serving on agencies such as the Federal Trade Commission (FTC), making them more directly accountable to the president.
The case arose from Trump’s dismissal of Federal Trade Commission Commissioner Rebecca Slaughter in March 2025 after the White House said her positions were inconsistent with the administration’s priorities.
Writing for the majority, Roberts said officials exercising executive authority ultimately remain accountable to the president.
Together, the two rulings draw a sharp distinction between the Federal Reserve—whose statutory protections remain intact—and other independent federal agencies, where presidential authority over appointments and removals has now been significantly strengthened.
Source: BBC
