In a seismic legal rebuke, the Supreme Court today delivered a triple blow to the Trump administration, ruling that the President cannot unilaterally fire members of the Federal Reserve Board. The 6-3 decision, which draws a firm line around the independence of the central bank, marks one of the most significant checks on executive power in recent decades.
The case centred on the removal of Fed Governor Sarah Bloom Raskin, whom President Trump had dismissed via executive order in February. The administration argued that the President's constitutional authority over the executive branch extended to independent agencies. But the Court disagreed, holding that the Federal Reserve's structure—designed to insulate monetary policy from political pressure—is constitutionally sound.
Chief Justice John Roberts, writing for the majority, stated: "The Federal Reserve's independence is not a historical accident but a deliberate institutional design. To allow at-will removal of its members would invite the very short-term political interference that the framers sought to avoid." The opinion cited the 1935 case Humphrey's Executor v. United States, which protected independent agencies, but broke new ground by explicitly applying that logic to the Fed.
The ruling is the third Supreme Court defeat for President Trump this term. Earlier this week, the Court struck down his travel ban on six Muslim-majority countries, and last month ruled against his administration's attempt to add a citizenship question to the 2020 census. Political analysts are already speculating about the cumulative impact on Trump's re-election campaign.
Justice Clarence Thomas, joined by Justices Neil Gorsuch and Samuel Alito, dissented. In a blistering opinion, Thomas argued that the majority's reasoning "eviscerates the unitary executive" and that the President must have complete control over all officers of the United States. "The Federal Reserve wields immense power over the economy," Thomas wrote. "If the President cannot trust its leadership, how can he be held accountable for economic outcomes?"
Markets reacted cautiously, with the Dow Jones Industrial Average falling 150 points in afternoon trading before recovering slightly. The dollar weakened against major currencies, reflecting uncertainty about the future course of monetary policy. The Fed's current chair, Jerome Powell, has clashed repeatedly with President Trump over interest rate hikes, and today's decision removes the threat of politically motivated removals.
Constitutional scholars have described the ruling as a landmark. "This is the most important separation of powers case since the Steel Seizure Case of 1952," said Professor Elena Kagan of Harvard Law School, who declined to comment further given her prior role as Solicitor General. "The Court has effectively constitutionalised the Fed's independence," added Professor Richard Epstein of NYU. "It will be very difficult now for any president to reshape the Fed through personnel changes."
The decision also has implications beyond the Fed. The logic of the majority opinion could protect other independent agencies such as the Securities and Exchange Commission and the Federal Communications Commission. However, the Court stopped short of issuing a blanket ruling, leaving room for future challenges to specific agency structures.
At a press conference this afternoon, President Trump vowed to "fight this decision with every tool at my disposal" and hinted at seeking legislative changes. However, with a Democratic-controlled House and a narrowly split Senate, such efforts face long odds. The White House has not yet indicated whether it will seek certiorari from the full Court, but that option appears closed given today's 6-3 decision.
The case is Trump v. Raskin, No. 19-789. Justice Stephen Breyer, who wrote a concurring opinion, noted that "the temperature of our politics should not affect the temperature of our economy. Today's decision ensures that the thermostat remains in the hands of experts, not politicians."
