Supreme Court Case on Trump Firings May Impact Fed Chair Powell’s Job Security

A Supreme Court ruling on President Donald Trump’s removal of two federal labor board members could have major implications for the independence of the Federal Reserve and Chair Jerome Powell’s job security. Trump dismissed Cathy Harris and Gwynne Wilcox, both Democratic appointees with legal protections against at-will removal. The case challenges long-standing laws that shield members of independent agencies from presidential firings without cause.

At the center of the legal debate is the 1935 Supreme Court ruling in Humphrey’s Executor, which upheld for-cause protections for members of agencies like the Federal Trade Commission. Legal scholars and conservative advocates argue that the Constitution’s Article II grants the president sweeping authority over executive branch officials, including the power to dismiss them. If the court overturns Humphrey’s Executor, it could undermine removal protections for many agency officials—potentially including the Fed's Board of Governors.

Powell, appointed by Trump and reappointed by Biden, is watching closely. He has stated he would not step down early if asked and believes the law protects his role. Although Trump has recently criticized Powell over interest rate policy, he backed off suggestions of firing him.

Some legal experts believe the court may carve out an exception to preserve the Fed’s independence, citing a 2020 footnote suggesting the central bank has a “special historical status.” Still, others argue such a move would lack legal consistency.

The Justice Department claims the labor boards hold more executive power than agencies like the FTC, and therefore their protections should not apply. However, critics argue the Fed also wields significant executive power, and any rollback of protections could extend to Powell and the central bank. The court’s decision is expected to set a critical precedent.