What Supreme Court Has Said About Firing Federal Reserve Chair
The U.S. Supreme Court has indicated that even if President Donald Trump can fire the heads of independent agencies, it may ensure there are protections to stop these powers applying to the Federal Reserve.
The Trump vs. Slaughter case is being heard by the Supreme Court, which, if approved, could give the president the power to dismiss the heads of independent agencies at will, changing a 90-year-old policy.
It stems from Trump firing Democratic FTC commissioner Rebecca Slaughter in March, whose term was not set to expire until 2029, but the findings could be applied to whether Trump can fire Federal Reserve Chair Jerome Powell, as tensions between Powell and the Trump administration escalate.
Why It Matters
The Trump administration has been locked in a conflict with Powell—whom he nominated in 2017—about lowering interest rates by 3 percentage points. The president has said lower borrowing costs will boost the economy and reduce the interest the federal government pays on its debt but Fed officials have warned that lowering interest rates could increase inflation.
What To Know
In May 2025, the justices said in a ruling that the relationship between the president and the Federal Reserve is different from those with other independent agencies. While they did not name him, this suggested Powell can’t be removed by Trump.
“The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” they wrote in an order.
Regardless, some justices seemed open to siding with Trump in the matter more broadly. In a December hearing, Chief Justice John Roberts said the precedent that stops presidents from removing independent-agency heads was “a dried husk of whatever people used to think it was.”
Conservative Justice Neil Gorsuch said: “I think broad delegations to unaccountable independent agencies raise enormous constitutional and real-world problems for individual liberty.”
But Justice Sonia Sotomayor accused the administration of asking the court to “destroy the structure of government” by eliminating Congress’ authority to create independent bodies.
“You’re asking us to take away Congress’ ability to protect its idea that the government is better structured with some agencies that are independent,” she said.
Justice Elena Kagan warned that the administration’s position would give presidents “massive, unchecked, uncontrolled power,” enabling them not only to oversee executive functions but to dominate policymaking and adjudication.
Meanwhile, Powell announced Sunday that the Department of Justice (DOJ) had served grand jury subpoenas threatening criminal indictment related to his June testimony before the Senate about the Fed’s $2.5 billion office building renovation project, which ran over budget. He said he believed it was connected to the administration pressuring him to lower interest rates. Trump denied having any knowledge of the investigation.
Newsweek reached out to the White House via email and the DOJ via online form on Sunday for comment.
What People Are Saying
President Donald Trump told NBC News on Sunday: “I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings. No. I wouldn’t even think of doing it that way. What should pressure him is the fact that rates are far too high.”
Federal Reserve Chair Jerome Powell said in the video statement released Sunday: “The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president.”
What Happens Next
The court’s decision is not expected for months. The Supreme Court is also hearing arguments about whether Trump can fire Federal Reserve Governor Lisa Cook.
Meanwhile, Trump has said he expects this month to nominate a new Fed chair to succeed Powell when his term ends in May.