WASHINGTON—The Supreme Court stated late last week that the president’s relationship with the Federal Reserve differs from that with other independent agencies, indicating that Chair Jerome Powell is legally protected from removal by President Donald Trump, Politico reported.
In a ruling that upheld Trump's decision to dismiss members of two independent U.S. labor boards, the justices said they did not believe the case had any bearing on whether the president could remove Federal Reserve board members or other officials on the central bank’s rate-setting committee, Politico said.
“The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” they added.
The court has not yet ruled on whether the two agencies involved in the case, the National Labor Relations Board and the Merit Systems Protection Board, qualify for exceptions to the president’s power to remove executive officials; that litigation is ongoing. But the order suggests that the Fed will be carved out from any final decision — a key win for the central bank, particularly given Trump’s longstanding criticism of Powell.
The president considered firing the Fed chief in his first term but backed off after an adverse market reaction. This time around, Trump has repeatedly called on the Fed to cut borrowing costs but has said he has “no intention” of firing Powell before his term as chair ends in May 2026.
The court has yet to decide whether the two agencies at the center of the case—the National Labor Relations Board and the Merit Systems Protection Board—qualify for exceptions to the president’s authority to remove executive officials, as that litigation remains ongoing. However, the order indicates that the Federal Reserve is likely to be excluded from any final ruling, marking a significant victory for the central bank, especially in light of Trump’s longstanding criticism of Chair Jerome Powell, Politico explained.
During his first term, Trump considered removing Powell but ultimately refrained after markets reacted negatively. More recently, he has repeatedly urged the Fed to lower interest rates but has stated he has “no intention” of dismissing Powell before his term expires in May 2026, Politoco added.