Supreme Court Draws The Line: Trump Can’t Fire Powell
Supreme Court Creates Exception for Federal Reserve
The Supreme Court has issued a significant ruling that allows President Trump to fire the heads of certain independent agencies while specifically protecting Federal Reserve Chair Jerome Powell. This decision creates a notable carve-out for the Federal Reserve, which the Court described as a “uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States.”
The ruling affects members of the Merit Systems Protection Board (MSPB) and National Labor Relations Board (NLRB), breaking a 90-year precedent that had protected independent board members from presidential dismissal. The Court’s majority suggested these agencies “exercise considerable executive power,” making their leaders subject to presidential control, while creating a specific exception for the Federal Reserve.
Powell’s Position Secure Until 2026
Jerome Powell’s position as Federal Reserve Chair remains secure until his term expires in May 2026, regardless of Trump’s previous criticisms. The Federal Reserve Act of 1913 specifies that Fed officials can only be dismissed “for cause,” not for policy disagreements or political reasons.
Trump has publicly expressed dissatisfaction with Powell, particularly regarding interest rate policies. In a Truth Social post, Trump stated that “Powell’s termination cannot come fast enough,” despite having appointed Powell to the position in 2017.
Justice Elena Kagan issued a strong dissenting opinion, criticizing the majority for allowing the President to “take the law into his own hands” and arguing the Court “blesses those deeds.” Her dissent highlights concerns about the legal reasoning behind the Court’s distinction regarding the Federal Reserve.
The decision reflects a longstanding Republican interest in expanding presidential authority over independent agencies under the “unitary executive theory.” This theory, favored by the Court’s conservative majority, argues that the Constitution grants the President control over all officials executing federal laws.
Protecting the Federal Reserve’s independence has significant economic implications. Historical examples, such as President Nixon’s influence over interest rates, demonstrate how political pressure on monetary policy can lead to economic instability.
The MSPB now lacks a quorum on its central board due to Trump’s removal of government workers, creating a backlog of cases. Fed governors, including the chair, are appointed by the president and confirmed by the Senate, with Trump expected to nominate Powell’s successor when his term ends.
The Court has not yet ruled on the full merits of the case, which is pending a decision from the U.S. Court of Appeals for the D.C. Circuit. This interim ruling maintains the status quo from a previous decision by Chief Justice John Roberts while signaling the Court’s likely direction on presidential powers over independent agencies.
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