Supreme Court signals Trump can’t fire Jerome Powell as Fed Chair gets legal protection from presidential wrath

The Supreme Court has issued a significant ruling that indicates Federal Reserve Chair Jerome Powell’s position is protected from presidential removal. This decision marks a crucial development in the relationship between the executive branch and the central bank. It came as part of a broader ruling that addressed Trump’s authority to dismiss members of independent U.S. labor boards.

In their ruling, according to Document Cloud, the justices made a clear distinction between the Federal Reserve and other independent agencies. They specifically referenced the Fed’s connection to the tradition of the First and Second Banks of the United States, setting it apart from other governmental institutions.

According to Politico, the Supreme Court signaled that Trump cannot fire Fed Chair Powell, establishing a legal barrier against presidential intervention in the central bank’s leadership. This protection comes at a crucial time, considering Trump’s previous criticism of Powell and the Fed’s policies during his first presidential term, when he considered removing Powell but ultimately decided against it due to negative market reactions.

Trump’s history with the Federal Reserve reveals ongoing tensions between White House and central bank

During his first term, Trump’s relationship with the Federal Reserve was marked by public criticism and disagreements over monetary policy. The former president has consistently pushed for lower interest rates, expressing his disapproval of the Fed’s decisions through various public statements and social media posts.

While the litigation regarding the National Labor Relations Board and the Merit Systems Protection Board continues, the Supreme Court’s order suggests that the Federal Reserve will remain exempt from any final decision regarding presidential removal powers. This exemption represents a significant victory for the central bank’s independence, particularly in maintaining its ability to make monetary policy decisions without direct political interference.

The ruling’s timing is particularly relevant as Powell’s term as Fed Chair continues until May 2026. Despite Trump’s current stance of having “no intention” of firing Powell, the Court’s decision effectively removes this option from the table, reinforcing the Federal Reserve’s operational independence from executive branch pressure. This legal clarification helps establish a clearer boundary between presidential authority and the Fed’s autonomous decision-making capacity.