Supreme Court May Back Some Trump Firings — But Signals It Will Protect Federal Reserve Independence

The U.S. Supreme Court's conservative majority appears ready to uphold President Donald Trump's authority to remove certain officials at independent agencies — yet the justices have signaled reluctance to extend that power to Federal Reserve officials, whose long‑held independence the court has described as distinct and important.

Background

On December 8 the court heard arguments in a challenge to President Trump's March removal of Rebecca Slaughter, a Democratic commissioner at the Federal Trade Commission (FTC). The justices' questioning suggested they may rule that the president acted within his authority in that case. By contrast, the court emphasized in a separate May order that the Federal Reserve holds a unique place in U.S. governance, and it has reserved judgment on whether firings like Trump's August removal of Fed Governor Lisa Cook should be treated the same way.

The Legal Fight

The Slaughter litigation turns on a 1914 statute that limits presidential removal of FTC commissioners to specific causes — "inefficiency, neglect of duty or malfeasance" — and not mere policy disagreement. If the court strikes down that protection, as its conservative justices appeared inclined to do during argument, it could empower presidents to remove officials from many multi‑member agencies and might undermine the 1935 precedent established in Humphrey's Executor, which upheld certain statutory tenure protections.

Why The Fed Is Different, According To The Court

Justices have repeatedly said the Federal Reserve differs from ordinary independent agencies. The Fed was created by Congress in 1913 with tenure protections for its governors, and the court has described it as a "uniquely structured, quasi‑private entity" that traces to earlier national banking institutions. The justices have expressed concern that adopting a broad rule allowing removal for policy differences could politicize monetary policy — for example, interest‑rate decisions — with consequences for inflation, employment and financial stability.

Facts And Positions

President Trump announced he removed Fed Governor Lisa Cook in August, saying the action was "for cause" and accusing her of pre‑appointment mortgage fraud — an allegation Cook denies and calls a pretext tied to policy disagreements. The administration argues that the Cook firing raises different legal questions because it claims cause, whereas in the Slaughter matter the White House made no such showing and framed the removal as a response to political misalignment.

"The other side says that your position would undermine the independence of the Federal Reserve and they have concerns about that, and I share those concerns," Justice Brett Kavanaugh told Solicitor General D. John Sauer during December 8 argument.

Kavanaugh has previously written that some agencies — citing the Federal Reserve — may merit insulation from direct presidential control because of their power to affect short‑term economic functioning. Legal scholars are split over whether the court can or should carve out a Fed exception without explaining a coherent legal doctrine for doing so.

Competing Historical Arguments

The U.S. Chamber of Commerce and other amici argue the Fed's independence is rooted in longstanding practice; they point to early institutions like the 1790 Sinking Fund Commission as historical precursors that operated outside direct presidential control. Critics of that view say the "Fed carve‑out" lacks a principled basis: the Federal Reserve Board, they note, in structure and practice resembles other multi‑member commissions and thus should be treated consistently under the law.

What’s At Stake

A ruling favoring the administration in Slaughter could narrow or eliminate statutory protections that Congress has used to insulate regulatory agencies from partisan removal. If the court simultaneously recognizes a Fed exception, it would preserve central‑bank independence while permitting broader presidential control over many regulatory agencies. Such a split outcome would have substantial implications for administrative governance, separation of powers, and the politicization of economic policy.

Next Steps

Arguments in the Cook removal are scheduled for January 21. Observers expect the court to craft a decision that balances its skepticism of for‑cause removal protections with concerns about destabilizing monetary policy. Whatever the outcome, the rulings will likely reverberate through the federal government and beyond.

(Reporting by Jan Wolfe; Editing by Will Dunham)