The Supreme Court handed President Trump a major win in reshaping the federal bureaucracy. But while the ruling gives Trump the authority to fire top officials from key federal agencies, it blocks him from firing Federal Reserve Chair Jerome Powell—setting up a constitutional showdown over executive power.

Trump Can Fire Agency Chiefs—But Not Powell

The Court ruled that Trump can remove members of the National Labor Relations Board (NLRB) and the Merit Systems Protection Board (MSPB)—positions long protected from political firing. The decision ends a 90-year-old precedent that required presidents to show cause before removing leaders of independent federal agencies.

But in a stunning exception, the Court drew the line at the Federal Reserve, ruling that its chairman cannot be dismissed at will. Powell, who has clashed with Trump over interest rate hikes, will remain in place until his term expires in 2026, despite Trump’s repeated public demands for his ouster.

Federal Reserve Deemed ‘Quasi-Private’ and Off Limits

While giving Trump sweeping control over executive agencies, the Court declared the Fed to be a special case. It cited the Fed’s “quasi-private” structure and historic precedent from the First and Second Banks of the United States to justify shielding Powell from termination.

US Supreme Court allows Trump to fire heads of independent agencies, does not apply to Fedhttps://t.co/JIYdyO9oqn

— ForexLive (@ForexLive) May 22, 2025

This ruling preserves the Fed’s independence—at least for now. The Federal Reserve Act of 1913 only allows the president to remove officials “for cause,” a safeguard meant to protect U.S. monetary policy from political pressure. That distinction gave Powell a legal shield the NLRB and MSPB chairs didn’t have.

Critics Warn of Dangerous Executive Overreach

Justice Elena Kagan blasted the ruling, calling it a “power grab” that undermines the rule of law. She warned that the decision gives the president too much unchecked authority and undermines agency independence, writing that it “blesses” executive actions without proper legal justification.

This portends a major blow to working people and their unions. https://t.co/cU4aGYeNij

— Benjamin Dictor (@BenjaminDictor) May 23, 2025

The ruling already has ripple effects. The MSPB is now leaderless, with no quorum to hear federal worker appeals. Critics fear this move paves the way for politicizing other regulatory agencies and further concentrates power in the White House.

The Court’s ruling marks a victory for the “unitary executive” theory, long championed by conservatives, that the president must have full control over the executive branch. It’s a major win for Trump—and a warning sign for anyone who values checks and balances in Washington.

Sources:

Supreme Court allows Trump to fire federal employee appeals board members at will – Government Executive

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