Jerome Powell, the chair of the Federal Reserve, is under attack from President Trump. The Supreme Court may soon rule on the legality of such a move.
In an emergency petition, the president has urged the country’s highest court to support his decision to dismiss the chairs of the Merit Systems Protection Board and the National Labor Relations Board, two further independent institutions.
It is a direct challenge to a 90-year-old Supreme Court precedent limiting the power of the president to dismiss independent agency board members except in cases of neglect or malfeasance. If that precedent falls, a Powell firing could be a lot easier to pull off at the Fed.
Other federal agency leaders, such as the Federal Trade Commission and the Federal Election Commission, have also received pink slips from Trump, and those dismissals are now being contested in lower courts.
A former FTC board member who went by Trump told Bloomberg, “There is no legal difference between Jerome Powell and me.” “The president can legally remove Jerome Powell if he can legally remove me.”
In an article published this week on Truth Social, the president expressed his desire to fire Powell, telling reporters that his “termination cannot come fast enough” and that “if I want him out, he’ll be out of there real fast, believe me.”
According to the Wall Street Journal, Trump has had secret discussions with former Fed governor Kevin Warsh, who might succeed Powell. However, some of Trump’s economic advisers have cautioned against firing Powell before his term ends in May 2026.
Kevin Hassett, the director of the National Economic Council, admitted to a reporter on Friday that Trump and his administration were considering firing Powell.
Powell, for his part, has emphasized time and time again that the law forbids his termination, and he reiterated this point last week.
Powell admitted that he is keeping an eye on the Supreme Court case that is currently questioning Trump’s power to fire board members at other independent agencies, but he stated, “I do not think that’s a case that will apply to the Fed.”
The central bank, however, is “monitoring it carefully.”
Section 10 of the Federal Reserve Act is the only legal text that expressly addresses the dismissal of Fed board members. Each board member will serve for 14 years, according to the law, “unless sooner removed for cause by the President.”
The statute doesn’t have any language that specifically addresses the chairman of the Board of Governors, nor does it detail what exactly constitutes “for cause.” The term has been interpreted in legal rulings to mean “inefficiency, neglect of duty, or malfeasance.”
