President Trump has taken a step back from firing Federal Reserve Chair Jerome Powell, but critics fear he could still try to remove him as early as next year. The move would set up a potential legal showdown that could upend nearly a century of precedent.
In 1946, the Supreme Court ruled in Humphrey’s Executor v. United States that President Franklin D. Roosevelt couldn’t fire the head of an independent agency without a good reason. This decision has been used as a basis for many independent agency developments.
However, some conservative legal experts believe the ruling should be overturned, arguing that the president has broad authority over his executive branch agencies. Pacific Legal Foundation senior attorney Oliver Dunford says the Supreme Court may reconsider Humphrey’s Executor, but it would likely focus on the question of whether the Federal Reserve is an independent agency.
NYU law professor Noah Rosenblum disagrees, saying the court will keep Humphrey’s Executor in place due to fears over the Federal Reserve’s independence. He believes Trump’s plan to fire Powell could lead to a “chickens coming home to roost moment” for the Supreme Court, highlighting concerns over old-fashioned rule of law values and economic stability.
The issue is set to reach the Supreme Court, with one case already making its way through the courts. A lower court reinstated a fired National Labor Relations Board member, and the White House has asked the justices to put her reinstatement on hold until they can consider the arguments.
Source: https://fortune.com/article/trump-jerome-powell-federal-reserve-supreme-court-humphreys-executor