Supreme Court Carves Out Federal Reserve in Dual Test of Trump's Firing Power

WASHINGTON — The U.S. Supreme Court is simultaneously weighing two challenges to presidential removal authority that legal experts believe will diverge sharply, with the Federal Reserve's structural independence appearing far better shielded than that of the Federal Trade Commission. The paired disputes — Slaughter v. Trump, involving FTC Commissioner Rebecca Kelly Slaughter, and Trump v. Cook, involving Federal Reserve Governor Lisa Cook — have become the central constitutional battleground over how far White House control of independent agencies can extend, with the outcome carrying implications for central-bank credibility well beyond U.S. borders.

The Administration's Split Legal Strategy

The Trump administration's Solicitor General John Sauer has argued differently in each case, a tactical gap that Catholic University of America law professor Joel Alicea says is deliberate and revealing. In Slaughter v. Trump, the administration mounted a direct constitutional challenge, contending that the FTC Act's statutory limits — restricting removal to instances of inefficiency, neglect of duty, or misconduct — unconstitutionally infringe on the president's Article II executive authority. That argument asks the Court to overturn or narrow Humphrey's Executor v. United States, the 1935 precedent that has anchored the legal independence of multi-member commissions for nine decades.

In Trump v. Cook, however, the administration chose a narrower path. Rather than making a broad constitutional argument against Federal Reserve Act removal protections, it claimed only that Trump had satisfied the statute's existing "for cause" standard by citing alleged misconduct tied to mortgage disclosure documents. Alicea noted that the decision to avoid the constitutional argument in Cook reflects the Court's prior signals that the Fed occupies distinct legal ground.

The Fed's Exceptional Status

The Supreme Court reinforced that distinction in its emergency ruling in Trump v. Wilcox, which allowed the removal of National Labor Relations Board and Merit Systems Protection Board officials to proceed during litigation while explicitly stating the decision should not be read to threaten Federal Reserve tenure protections. The Court described the Fed as a "uniquely structured, quasi-private entity" rooted in a historical tradition tracing to the First and Second Banks of the United States.

Erin Hawley, chair of Lex Politica's Supreme Court and Appellate Practice, said that lineage may prove decisive. The Court has signaled that the Fed's core monetary policy function carries constitutional weight precisely because of that banking-system precedent, even as the Fed's broader rulemaking activities could theoretically be characterized as executive in nature.

A bipartisan coalition of former Federal Reserve chairs, former Treasury secretaries, and economists filed a brief with the Court arguing that expanded presidential control over Federal Reserve governors risks undermining central-bank independence, which they said decades of macroeconomic research links to lower, more stable inflation without higher unemployment.

Stakes Beyond the Current Administration

A ruling favoring Trump in Slaughter would carry consequences for every future White House. Carrie Severino, president of the Judicial Crisis Network, noted that the authority at stake applies to any president, citing former President Biden's own use of the firing power. The Court may also face a novel procedural question that legal scholars say has never been directly adjudicated: whether federal judges hold the authority to compel a president to reinstate a removed agency head. That remedy question, flagged by Alicea, could prove as consequential as the underlying removal dispute itself.

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