Early Thursday morning, April 17, President Donald Trump angrily railed against U.S. Federal Reserve Chairman Jerome Powell on his Truth Social platform.
Trump posted, “The ECB is expected to cut interest rates for the 7th time, and yet, ‘Too Late’ Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!’ Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS. Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now. Powell’s termination cannot come fast enough!”
In an article published later that morning, Axios’ Avery Lotz poses a question: Does Trump have the authority to fire Powell?
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Trump, of course, has the power to fire members of his administration. During his first presidency, he fired everyone from a national security adviser (John Bolton) to a secretary of state (Rex Tillerson). But Fed chair is not a Cabinet position, and the U.S. Federal Reserve is independent from the White House.
“President Trump’s latest social media tirade against Fed Chair Jerome Powell is raising the possibility of an unprecedented — and experts say prohibited — use of executive power,” Lotz reports. “Why it matters: Trump may want to remove the country’s most powerful economic policymaker, but it won’t be as easy as telling him, ‘You’re fired!’ He’d likely need an assist from the Supreme Court…. Some of its conservative justices have already signaled they’re open to providing.
The U.S. Federal Reserve was created 112 years ago when Democratic President Woodrow Wilson signed into law the Federal Reserve Act of 1913.
“The Federal Reserve Act, which established the Fed more than a century ago, spells out that the central bank’s governors are to serve 14-year terms,” Lotz explains. “They can only be dismissed for cause, which courts have generally interpreted to mean malfeasance, not policy disputes. Powell, whose term runs through May 2026, has said removal of top officials from the independent central bank is ‘not permitted under the law.”
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Lotz continues, “Here is what to know about removing a Fed chair…. Scholars often point to a 1935 Supreme Court decision they say backs the Federal Reserve Act’s cause for termination clause, the Wall Street Journal reported. In the case, Humphrey’s Executor v. United States, the High Court blocked then-President Franklin D. Roosevelt from booting a commissioner off the Federal Trade Commission. That precedent prohibits commissioners at independent agencies from being fired at will…. If a legal battle ensues, the Supreme Court would likely have to clarify whether Humphrey’s Executor applies to the chair of the Fed’s Board of Governors.”
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Read Avery Lotz’s full Axios article at this link.
