Uncharacteristically for him, Donald Trump is being too modest in asserting his power over the Federal Reserve.

He’s fired Lisa Cook “for cause,” citing a clearly pretextual alleged mortgage infraction, when as a constitutional matter, he should be able to fire her, or Chairman Jerome Powell, for any reason he deems appropriate.

The independence of the Federal Reserve largely rests on its status as a constitutional anomaly, exercising executive authority without being subject to the same rules as the rest of the executive branch. There are good policy reasons for this — an independent central bank promotes monetary stability — but the Fed has been granted, in effect, an exemption from our constitutional order for prudential reasons.

The Fed itself isn’t in on the joke. Lisa Cook thinks she can’t be fired and is suing to keep her job, while Jerome Powell has laughably maintained that he can’t be removed from the chairmanship.

Cook can only be given a pink slip for “cause,” according to the statute. “Cause” is a broad term, though. If it is interpreted the usual way, it would include a refusal to carry out a presidential directive or policy disagreements. As for Powell, there isn’t even any statuary restriction on dismissing him as chairman.

The head of the Consumer Finance Protection Bureau was also supposed to be insulated from removal thanks to a provision saying that it had to be “for cause.” How did that turn out? In 2020, the Supreme Court held that such a constraint was unconstitutional.

This decision was in keeping with the Court’s recent drive to vindicate the president’s power to fire at will officials whose agencies carry out executive functions.

Article II of the Constitution doesn’t explicitly say the president can fire executive-branch officials, but it is implied in the president’s power to run the executive branch, as such Founding-era luminaries as James Madison, Alexander Hamilton, George Washington and Thomas Jefferson recognized.

In a 1922 Supreme Court case, Chief Justice Taft wrote for the majority that as the president’s “selection of administrative officers is essential to the execution of the laws by him, so must be his power of removing those for whom he cannot continue to be responsible.”

The rise of independent agencies with the New Deal and a Supreme Court decision called Humphrey’s Executor, saying FDR couldn’t fire at will the commissioner of the Federal Trade Commission, sent the removal power into retreat.

But the decision in the CFPB case undercut the logic of Humphrey’s Executor, as have other recent decisions. In a concurrence in the CFPB case, Clarence Thomas said it wasn’t clear what was left of the reasoning of Humprhey’s. Whatever remained, he wrote, wasn’t enough “to justify the numerous, unaccountable independent agencies that currently exercise vast executive power outside the bounds of our constitutional structure.”

That should have gotten the Fed’s attention.

The Court has sidestepped the status of the Federal Reserve in its removal-power jurisprudence. But there’s no legal reason that it should be considered an oasis standing apart from the Court’s ruling that there is no “de facto fourth branch of government” lacking “accountability to either the president or the people.”

The Fed clearly exercises executive power in its vast regulatory functions, just as the CFPB does. It promulgates rules, polices banks and issues fines. The Court has held that if an agency exercises executive power only in a fraction of its functions, it is subject to the president’s removal power.

The cleanest solution would be to pass a constitutional amendment authorizing an independent Fed or a similar entity. Short of that, the Federal Reserve’s regulatory functions could be handed over to another executive agency (although core monetary functions of the Fed also may be executive in nature).

The Supreme Court will surely be reluctant to grasp the nettle on the Fed. Yet, there’s little doubt that, on the legal merits, Lisa Cook should be sending out her resume.

© 2025 by King Features Syndicate