WASHINGTON -- The Supreme Court on Monday rejected President Trump's bid to fire Federal Reserve governor Lisa Cook without meaningful legal scrutiny, reaffirming the central bank's longstanding insulation from presidential control.
But in a second decision, the court gave Trump free rein to fire officials at other independent agencies for any reason, a major expansion of presidential power over the vast regulatory apparatus that sits over the U.S. economy.
The two decisions, both written by Chief Justice John Roberts, effectively delivered a split verdict on Trump's second-term effort to exert maximal control over the executive branch.
By a vote of 5-4, the court in the Cook case dealt a stinging blow to Trump's mission to remake the Fed, which he has repeatedly criticized for not lowering interest rates more aggressively. In a separate case involving the Federal Trade Commission, the court in a 6-3 ruling gave the president broad latitude to oust leaders of policymaking agencies that Congress sought to shelter from political pressure. Those agencies set rules on everything from consumer protection and collective bargaining to the safety of nuclear reactors.
The high court drew a line at the speed and informality of Trump's move to unseat Cook.
Accepting Trump's position "would allow the president to remove a member of the Federal Reserve at any time, for any reason, without any notice before, and without any judicial check after," the chief justice said.
Roberts was explicit that something larger than Cook's job was at stake. Allowing a president to fire governors at will would threaten the central bank's ability to set policy free from political pressure, the core reason Congress made the Fed independent in the first place, he wrote.
"Not only the fact of independence but also the appearance of independence is key to the Federal Reserve's design," Roberts wrote. Without limits on removal, he warned, Fed governors would know that any perceived or alleged misstep could lead to their removal, something that "would surely weigh" on rate-setters as they decided how to do their jobs.
The ruling reinforces the Fed's insulation just weeks after Kevin Warsh, Trump's choice for chairman, took office.
President Joe Biden appointed Cook in 2022 to her seat on the Fed's seven-member board of governors. Last August, Trump attempted to fire her, posting on social media that she "must resign" and then, days later, sending a letter notifying her that he was removing her immediately. It was the first time in the history of the central bank that a president had tried to remove one of its members.
Trump cited allegations by one of his top housing officials, Bill Pulte, that Cook in 2021 lied about her primary residence on mortgage paperwork to obtain more favorable terms from a lender. Trump gave Cook no formal opportunity to contest the allegations.
She denies any wrongdoing. Her lawyers have said the matter was, at worst, an inadvertent error and that the allegations are merely a pretext for Trump's true goal of controlling monetary policy by installing loyalists at the Fed.
Roberts made clear that Cook cannot be fired without some minimal procedural protections that would allow the evidence to be aired.
"Only then," Roberts added, "can the courts assess the validity and sufficiency of such charges."
In a social-media post Monday, Trump played down the implications of the court's ruling, saying the justices had ruled against him "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!" he wrote.
Pulte signaled the campaign would continue. In a social-media post, he repeated an assertion he has made in recent weeks: "I believe Lisa Cook will be indicted for mortgage fraud."
Cook argued in a lawsuit that Trump's attempt to fire her violated a federal law that says the president may remove Fed members only "for cause." Two lower courts blocked Trump from firing her while her lawsuit proceeded.
The Supreme Court's decision maintains that block, meaning Cook can stay in her job for months or even years while her case goes back to the lower courts for further litigation.
"This was never about mortgage documents signed years before I became a Federal Reserve governor," Cook said. "It was an attempt to remove me on a manufactured pretext because I refused to bow to political pressure."
The decision scrambled the high court's usual ideological alignment. Roberts, a conservative, was joined in the majority by Justice Brett Kavanaugh, a Trump appointee, and the court's three liberal justices: Sonia Sotomayor, Elena Kagan and Ketanji Brown Jackson.
Four conservatives dissented: Justices Clarence Thomas, Samuel Alito, Neil Gorsuch and Amy Coney Barrett.
Thomas wrote in dissent that alleged mortgage fraud was sufficient "cause" for Trump to fire Cook and that she wasn't entitled to a formal hearing to contest the allegations.
"The Court makes many policy arguments for an 'independent' banking agency that exercises executive power free from accountability, but those are ultimately arguments against the Constitution," Thomas wrote.
The case has been closely watched on Wall Street, where investors have long treated Fed independence as a pillar of the bond market's stability. Investors might be less willing to buy U.S. Treasury securities, leading to higher interest rates, if they feared a president could remake the Fed's board at will and push for policies that tolerate higher inflation.
Trump has faced other legal setbacks in his bid to reshape the Fed. A federal judge stymied the Justice Department's attempt to investigate former Fed Chair Jerome Powell, throwing out subpoenas that were part of a probe into his congressional testimony about the central bank's building-renovation project. The judge ruled they were improper and appeared designed to pressure Powell into lowering interest rates or resigning.
The other case decided Monday involved Rebecca Slaughter, a Democratic member of the FTC. Trump fired her in March 2025, saying her service on the five-member commission conflicted with his administration's priorities.
Slaughter's ouster was part of an effort by Trump to take control of the leadership at various regulatory agencies that are housed in the executive branch but have long operated with a measure of independence. Those include the National Labor Relations Board, the Consumer Product Safety Commission and the Nuclear Regulatory Commission.
Congress established these agencies to be run by boards of experts who are appointed by the president and serve lengthy staggered terms. Congress gave the board members job security by prohibiting the president from firing them unless they commit serious misconduct or neglect their duties.
In 1935, the Supreme Court upheld the constitutionality of the job protections for FTC members. Trump challenged that precedent, arguing it infringed on his ability to run the executive branch.
The high court agreed in a 6-3 decision that divided the justices along ideological lines. The ruling will entrench a new landscape for regulatory policymaking, legal experts say.
Supporters of independent agencies have long promoted a vision in which sensitive policy areas are overseen by bipartisan panels of experts who could exercise their judgment without fear of political reprisals.
That vision has now been replaced by the alternative conviction that federal regulators should be directly accountable to the president.
"Subordinates who exercise the President's power are subject to removal by him," Roberts wrote. "Then, and only then, can they remain accountable to the President, and the President to the people."
Sotomayor, writing for the liberal dissenters, said the decision "distorts the structure of Government to fit the majority's theory of unitary, total executive control" and leaves the president "with far greater power than ever before."
Write to James Romoser at james.romoser@wsj.com and Nick Timiraos at Nick.Timiraos@wsj.com
(END) Dow Jones Newswires
June 29, 2026 16:25 ET (20:25 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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