A Supreme Court Ruling on Labor Boards Could Let Trump Take Over the Federal Reserve

If the Supreme Court rules that President Donald Trump is allowed to fire the members of the National Labor Relations Board and the Merit Systems Protections Board, the justices would also be implicitly giving Trump more control over interest rates and monetary policy, a group of legal scholars and the fired board members argued to the top court this week.

On its face, the case in question is just about fired federal workers — specifically, Gwynne Wilcox from the NLRB and Cathy Harris from the MSPB.

But all the parties agree that a bigger legal question is at play on the subject of the president’s power. Some close court watchers say the only logical extension of the government’s arguments is political control over the Federal Reserve too.

Jerome Powell, the Fed’s chair, said, “It’s a situation that we’re monitoring carefully,” at The Economic Club of Chicago on Wednesday. “That’s a case that people are talking about a lot. I don’t think that that decision will apply to the Fed, but I don’t know.”

Trump posted on Truth Social Thursday morning that Powell’s “termination cannot come fast enough!”

The fired board members are hoping the threat of a politician controlling interest rates will convince the Supreme Court to side with them. (The court temporarily sided with Trump on the issue last week, allowing the board members’ removals to proceed as it considers the case).

“At a time when the President is publicly pressuring the Fed Chair on monetary policy, experts warn that any signal from this Court that the Fed’s independence is in jeopardy will further unsettle jittery markets,” Wilcox’s attorneys told the Supreme Court on Tuesday.

Harris’ attorneys echoed a similar refrain: “It is incoherent to argue that the Constitution provides the President unfettered authority to terminate everyone who exercises the smallest amount of executive power — but then blow a massive hole in that constitutional theory for the Federal Reserve.”

Trump explicitly carved out the Federal Reserve from a February executive order aimed at reigning in agency independence, writing that the order “shall not apply” to the parts of the agency that control monetary policy.

But legal scholars are arguing that splitting the Fed into independent and nonindependent arms is impossible. And if SCOTUS overturns a 90-year-old precedent barring presidential removals without cause per its 1935 Humphrey’s Executor decision, it could open the door to presidents having power over the Fed anyways, even if Trump says he wouldn’t exert it. That removal threat, especially if there’s a legal justification for it, could be powerful either way.

“The power of removal is not just being able to get rid of somebody that you no longer want in the office. Once you realize that you’re removable at will, that might also make you more likely to comply with the president’s demands,” Marquette University legal scholar Christine Chabot told NOTUS.

Powell insisted Wednesday that “generally speaking, Fed independence is very widely understood and supported in Washington and in Congress, where it really matters,” and that no matter what people say, “we will do what we do strictly without consideration of political or any other extraneous factors.”

On Tuesday, a group of attorneys from Harvard and Columbia universities filed an amicus brief to SCOTUS in the labor case, arguing, “The Fed’s independence rests on the same legal foundations as the independence of the National Labor Relations Board and the Merit Systems Protection Board.”

A SCOTUS ruling siding with the government’s “reading of Humphrey’s Executor would eliminate Fed independence,” and “Overruling Humphrey’s Executor would even more clearly undermine the Fed’s independence,” they argued.

The stakes of the case are “higher inflation, lower economic growth as a result of throwing out an institutional structure that shields monetary policy decision-making from short-term partisan political pressure,” one of the amicus authors, Columbia scholar Lev Menand, told NOTUS.

Attorneys for the government disagree. They previously argued to a lower court that there is a legal path to exempt the Federal Reserve from presidential control because of the way it was created.

“Harris claims that granting a stay here would improperly call into doubt the removal restrictions for the Federal Reserve Board of Governors,” the governments’ attorneys wrote in a filing last month. “That is incorrect, as Supreme Court Justices and court of appeals Judges have observed. The Federal Reserve is ‘a unique institution with a unique historical background.’”

Other proponents of Trump’s ability to fire the board members — both a group of Republican attorneys general and the gun-rights organization Gun Owners of America filed amicus briefs — agree that the case is really about presidential power, but hope it’s be used to knock down what they see as bad precedent limiting Trump’s power.

“Humphrey’s Executor is no longer good law,” a group of states led by Florida’s attorney general, James Uthmeier, wrote. “That case should not serve as precedent for further encroachment on the President’s power of removal by the legislative branch.” (Louisiana, New Hampshire, Pennsylvania and Wyoming’s attorneys general were the only Republican state attorneys general not to sign onto that brief.)

They argue that Article II of the Constitution grants the president all power over the executive branch — a view sometimes called the unitary executive theory, which is espoused by various Project 2025 authors. The Project 2025 chapter on the Federal Trade Commission explicitly called for overturning Humphrey’s Executor.

The Supreme Court is expected to decide within weeks whether Trump’s removals can remain in effect, but the merits of Wilcox’s and Harris’ removals will continue to go through the appeals court process. Some experts say whichever way the courts eventually rule, it could lead to a complicated legal landscape where agencies’ independence is litigated case by case.

“I do expect Humphrey’s Executor probably to fall, but one could still argue that even if the president generally has removal power and directive power, those powers don’t make sense for certain agencies,” Harvard constitutional legal scholar Nicholas Stephanopoulos told NOTUS.

“If Humphrey’s falls, the next stage of the battle might be working out what, if any, agencies are partial exceptions to the new unitary executive rule,” he added. “Elections are special, and there’s a particular danger of having a political president be able to run the activities of the election administration body in our system … I can imagine similar arguments being made about how special the Fed is.”

Recently removed Federal Election Commissioner Ellen Weintraub also told NOTUS that elections in particular are particularly vulnerable to presidential overreach, particularly when politicians have a vested interest in their outcomes.

“I think Humphrey’s Executor was rightly decided, it applies to all independent agencies, it should continue to be upheld, but I do see the FEC as somewhat uniquely situated,” Weintraub said.

Nervous legal watchers say that even if the court finds a way to distinguish the Federal Reserve or the FEC from its ruling on the labor regulators cases, the unitary executive theory of presidential power isn’t going away anytime soon.

“Under his constitutional theory, he should be able to tell the Federal Reserve, ‘Lower interest rates today by two points,’ and have them do it,” Temple University legal scholar Craig Green told NOTUS. “Which is dramatic.”

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Claire Heddles is a NOTUS reporter and an Allbritton Journalism Institute fellow.