The headline is dry and judicial: the Supreme Court has blocked President Trump’s firing of a Federal Reserve governor. But on the ground, in the coffee shops of London and the trading floors of Canary Wharf, the reaction is something else entirely. A quiet sigh of relief, perhaps, laced with a dose of British smugness.
Let’s be clear: we don’t have a written constitution, but we do have a deep cultural reverence for institutional checks and balances. When the highest US court steps in to stop a president from sacking an independent central banker, it sends a shiver down the spine of every economist who grew up reading Walter Bagehot. The Fed’s independence is not some abstract principle. It is the bedrock of stable money, of low inflation, of the kind of boring predictability that lets businesses plan and families budget.
What strikes me most is the human cost of this political theatre. Imagine being the Fed governor in question. Your job is to think about interest rates, not whether you’ll be fired by tweet. For months, the uncertainty has been palpable. Business owners in the Midlands, exporting to the US, have been watching the news with a knot in their stomach. A politicised Fed means volatile rates, which means cancelled orders, delayed investments, maybe even redundancies.
And yet, the British economic establishment has had a field day. Our own Bank of England’s independence is seen as a model, and the Supreme Court’s ruling is a vindication of that model. You could almost hear the tweed jackets rustling in the common rooms of the LSE. ‘You see?’ they seemed to say. ‘This is why we have independent institutions.’ It is a moment of cultural schadenfreude, but also a warning. We are not immune to populist impulses. The same pressures that led to this attempted firing exist here too.
But the real story is not the legal victory. It is the social psychology of trust. Trust in institutions has been eroding for years. A Gallup poll last year showed only 36% of Americans had confidence in the Supreme Court. A president attacking the Fed feeds that distrust. And when trust breaks down, people behave differently. They hoard cash, they shy from risk, they demand higher wages. The cost of that is paid not in Washington, but in the high streets of Manchester and the car plants of Sunderland.
The ruling is a pause, not a reversal. The battle over the Fed’s independence will continue. But for now, the guardrails held. And that, in a world of democratic erosion, is something worth noting.
The British reaction is instructive. We admire American resilience, but we also worry. If the US under Trump can move toward politicising its central bank, what’s to stop a future UK government from taking a swipe at the Bank of England? The human element here is simple: stability is a public good. And when it’s threatened, everyone pays.
