The US Supreme Court has blocked President Donald Trump's attempt to remove Federal Reserve Governor Lisa Cook, in a 5-4 ruling that is widely seen as reinforcing the central bank's independence.

The justices ruled that the administration had not provided Cook with sufficient "due process" to challenge her dismissal. The case will now return to lower courts, where the administration must prove its allegations that Cook committed mortgage fraud. Cook will also have the opportunity to contest the accusations.

Cook has denied the allegations, which supporters of the Federal Reserve argue are a pretext for increasing presidential influence over the central bank.

Under US law, a president may remove a Federal Reserve governor only "for cause," a safeguard intended to protect the institution from political pressure and preserve its independence in setting monetary policy.

During arguments before the Supreme Court in January, Cook's lawyer, Paul Clement, said the administration's approach to the dismissal would make Congress' intended protections for the Federal Reserve "kind of a joke".

Trump announced his intention to remove Cook in August, alleging she had filed mortgage documents claiming two different primary residences at the same time. Such designations can qualify borrowers for lower interest rates.

Representing the White House, Solicitor General John Sauer argued that Trump's social media announcement provided adequate notice and an opportunity for Cook to respond. He said the alleged conduct, even if inadvertent, amounted to "negligence" that could undermine confidence in the Federal Reserve and argued that courts should defer to the president's judgment in determining whether cause for removal exists.