US Supreme Court Rules Fed Independent, Limits Trump Firing Powers

The U.S. Supreme Court issued a ruling that allows President Donald Trump to keep two federal labor board members sidelined despite legal challenges to their removal, but explicitly carved out an exception for the Federal Reserve. The Court described the Fed as a "uniquely structured, quasi-private entity" with protections for its officials, including Chair Jerome Powell, who can only be removed "for cause." This distinction preserves the Fed's longstanding independence and prevents a precedent that would allow Trump or any future president to unilaterally fire Powell or other Fed officials for political reasons. Despite Trump's public criticisms and previous threats to remove Powell over interest rate policies, the ruling and its language have helped ease concerns in financial markets about the Fed's autonomy. Powell has expressed confidence in the legal protections securing his position and plans to serve his full term until 2026. However, the Court's decision is temporary pending further appeals, and dissenting justices criticized the Fed exception as a special measure to calm markets rather than a consistent legal standard.