President Trump recently hinted he might fire Federal Reserve Chair Jerome Powell before his term ends next year, citing disagreements over interest rate policies.
Powell maintains such a dismissal is illegal, and markets reacted negatively to the suggestion. Harvard Law Professor Daniel Tarullo, a former Fed Board member, explains there are two key legal questions: whether the Fed Chair position has “for cause” removal protection, and whether the Supreme Court would uphold presidential removal power over independent agency officials.
Tarullo notes that while the Supreme Court has been expanding executive authority, several conservative justices have hinted they might view the Federal Reserve differently than other agencies, potentially due to its historical independence dating back to the First Bank of the United States.