Firing Fed chief Jerome Powell is more problematic than Trump thinks

Yahoo

28-04-2025

Question: Can the president remove heads of independent agencies, such as the Federal Reserve and U.S. Postal Service?
Answer: The question of whether the president can simply remove the heads of federal agencies has become more complicated. The answer used to be straightforward, and depended on the legislation that created the agency or position. There is usually a process in the law which explains how and when an agency head can be removed, and under what circumstances. In some cases, the president's power to act is limited under the law, usually as an attempt to insulate the agency from direct political influence.
A good example is the U.S. Postal Service. I have discussed previously in this space why then-President Joe Biden could not simply remove Louis DeJoy, the controversial postmaster who was appointed during Donald Trump's first term. Unlike most executive branch agencies which have a single leader appointed and removable by the president, the Postal Service is overseen by a Board of Governors. Under the Postal Reorganization Act of 1970, there are nine governors appointed by the president and confirmed by the Senate for staggered seven-year terms. Under that law, the postmaster is appointed or removed by the other members of the board, not the president or the Senate.
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Similarly, under the Federal Reserve Act of 1932, persons nominated by the president and approved by the Senate as governors to the U.S. Central Bank are to serve 14-year terms, with one serving a concurrent four-year term as chair. The current Federal Reserve chair is Jerome Powell, and his term runs through May 2026. Under the Federal Reserve Act, governors can only be dismissed for cause. "Cause" is a legal term which generally means some type of malfeasance, not a policy disagreement. The purpose here was to preserve the Central Bank's ability to fight inflation, which is often unpopular and contrary to elected leaders who often prefer to push growth through low interest rates.
Courts have upheld limitations of the president's ability to remove some officials. In the landmark U.S. Supreme Court case of Humphrey's Executor v. United States (1935), the Court held that President Franklin D. Roosevelt could not remove a commissioner of the Federal Trade Commission (FTC) for policy disagreements. Similarly, in Morrison v. Olson (1988), the Court confirmed that Congress could constrain the President's removal of "inferior officers with limited duties and no policymaking."
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However, some lawyers and pundits argue that the precedent is wrong and the president, as the head of the executive branch, should not be bound by the limitations created by Congress and can terminate anyone in the executive branch without limitation. This is sometimes called the "unitary executive" theory. The idea received some support in Seila Law v. CFPB (2020), where then-President Trump was able to replace the head of the Consumer Financial Protection Bureau despite the restrictions in the law.
Nonetheless, as the law currently stands, the president does not have the freedom to remove the postmaster or the chair of the Federal Reserve. However, that may change as this issue is likely to be the subject of more litigation in the coming years.
Kevin Wagner is a noted constitutional scholar and political science professor at Florida Atlantic University. The answers provided do not necessarily represent the views of the university. If you have a question about how American government and politics work, email him at [e-mail].
This article originally appeared on Palm Beach Post: Trump and Powell are likely stuck with one another - for now | Opinion