President Donald Trump was angry after a Supreme Court ruling showed he did not have the power to fire Federal Reserve Chair Jerome Powell. The Court’s decision, which was part of a ruling about removing officials from other independent agencies, said the relationship between the President and the Federal Reserve is special.
The Court pointed out that the Federal Reserve has a unique structure as a partly private organization with roots going back to the First and Second Banks of the United States. This difference, the Court said, makes the Federal Reserve unlike other independent agencies discussed in the same ruling, as reported by The Daily Beast.
The Supreme Court’s ruling dealt with cases about removing members from the National Labor Relations Board and the Merit Systems Protection Board. While the Court allowed the President to fire officials from these agencies, it made clear that this did not apply to the Federal Reserve. As reported by Politico, the justices mentioned that there is still legal debate over whether these two agencies are exceptions to the President’s power to remove executive officials. However, they suggested the Federal Reserve would not be included in any such exception.
The Supreme Court lets Trump know he can’t fire Powell
President Trump’s complaints about Powell have been steady. During his first term, he thought about firing Powell but decided against it after negative reactions from financial markets. More recently, Trump has pushed Powell to cut interest rates and has openly said he wants him removed from his job. He has posted on social media and made public statements demanding Powell’s immediate firing.
Trump has recently softened his tone, likely because he is worried about how directly attacking the Federal Reserve’s independence could affect financial markets. Even with this change, the tension between them remains. The Supreme Court’s decision has major consequences for the Federal Reserve’s independence. The ruling supports the idea that the Federal Reserve has a special status, keeping it safe from direct political control.
$TLT
— Charu (@charultd) May 23, 2025
Supreme Court insulates Fed as it backs Trump firing of agency leaders
Powell stays pic.twitter.com/UuwntIQUN3
The decision is an important win for the central bank, defending its ability to operate without interference and avoiding the chaos that could come from a politically driven removal of the Chair. This ruling also affects the bigger picture of how the executive branch interacts with independent agencies. The Supreme Court’s clarification about the Federal Reserve shows a careful approach to executive power when dealing with different kinds of independent agencies, emphasizing the specific history and structure of each one.
Justice Kagan disagreed with the majority’s decision, arguing that it gives the President too much power compared to existing legal standards. Those standards come from a case involving President Franklin Delano Roosevelt’s firing of a Federal Trade Commission member, which set limits on a President’s ability to remove officials just for political reasons.
Justice Elena Kagan wrote that the court’s order “favors the president over our precedent,” in her dissenting vote. The new ruling changed this historical precedent, creating a fresh standard for how the executive branch and the Federal Reserve relate to each other. Chair Powell has said he plans to serve his full term, which ends in 2026.
