Can the President Fire the Fed?

GrantTwo opinions, same morning, same- author, and they point in opposite directions. That's where we're starting today.

MayaOkay, so get this. Chief Justice Roberts writes both of them. One blows up ninety-one years of precedent, the other pumps the brakes. Same pen, same day.

GrantThe math on that does not compute at first glance.

MayaRight? And yet. Welcome to Power Check. I'm Maya.

GrantAnd I'm Grant. What we're tracking today, the Supreme Court's 6-3 ruling in Trump vs. Hunt versus Slaughter. NPR reported is the final blow to Humphrey's Executor, a ninety-one year precedent that protected independent agency commissioners from being fired at will.

MayaGone. Ninety-one years done.

Speaker 3Wow.

MayaAnd the agencies we're talking about, FTC, NLRB, EEOC, these are the ones touching people's jobs, their credit, their workplace rights.

GrantInvestment-grade independence. Apparently not anymore.

MayaBut wait, same morning, 5-4, Roberts also blocks Trump from firing Fed Governor Lisa Cook, for now.

GrantFor now is doing a lot of heavy lifting in that sentence. The constitutional question isn't settled. The lower court still has to decide whether Trump's mortgage fraud allegation against Cook actually qualifies as legal cause under the Federal Reserve Act.

MayaPlot twist, Trump announced the firing on Truth Social. No notice, no chance for Cook to respond.

GrantAnd Roberts flagged that as the procedural problem, which is a narrow floor, not a guarantee.

MayaSo we've got the biggest executive power ruling of a generation on one side and a for now on the other. We're going to walk through both, what the law actually says, what breaks, and whether any of the checks are still working.

GrantStarting with the Slaughter ruling itself, ninety-one years of precedent overturned. Let's look at what was actually in Humphrey's Executor and why Roberts said it no longer applies. Pause.

MayaSurpassed dozens of years of precedent has been completely and unequivocally overruled; that's Trump on Truth Social yesterday morning—all caps—celebrating.

GrantAnd here's what makes that morning strange: he posted that

MayaYeah.

Grantwhile a second ruling from the exact same court was blocking him from firing a Federal Reserve governor.

MayaSame morning, both opinions authored by the same person.

GrantDeadpan Chief Justice Roberts, who expanded presidential power dramatically in one case and then within the same hour pumped the brakes in the other.

MayaI mean, how?

GrantThat is the question. The FTC case (Trump vs. Slaughter) was six three. Roberts wrote it for the conservative majority, overturned Humphrey's Executor, the nineteen thirty-five precedent that had shielded independent agency heads for ninety-one years.

MayaNinety-one years gone.

GrantAccording to NPR, the court said independent agencies like the FTC exercise executive power and therefore must answer to the President. FTC Commissioner Rebecca Slaughter, fired, no cause required.

MayaAnd then literally the same morning, Roberts turns around and says, wait, not the Fed.

GrantNow, five four on the Kucase, different lineup: Roberts

MayaMm

Grantactually

Mayahmm.

Grantjoined the three liberal justices plus Kavanaugh.

MayaOK, OK. So Roberts voted with the conservatives to blow up ninety one years of precedent and then crossed over. were to protect Lisa Cook.

Speaker 4CNBC reported the ruling blocks Trump's firing of Cook for now. Her lawsuits still have to play out. And the court was explicit: the Federal Reserve's independence, quote, is consistent with the Constitution.

MayaSo it's not a contradiction.

Speaker 4No, that's the structural move. Roberts drew a line. And he drew it deliberately: the FTC exercises executive power. The President controls that; the Fed," Roberts cited the Founders' fear of political manipulation of monetary policy going back to the First Bank of the United States.

MayaSo it's not about protecting Lisa Cook personally.

Speaker 4Right, it's about what the institution is.

MayaWhich means the interesting question isn't why Roberts did both; it's exactly where he drew that line, and whether it holds.

Speaker 4You want to understand why this morning shook people? You have to go back to nineteen thirty-five and look at what Roberts just killed to get here.

GrantSo to understand what Roberts killed, you have to go back to nineteen thirty-five. FDR tried to fire an FTC commissioner named William Humphrey, not for misconduct, just because they disagreed on policy.

MayaAnd the court said no?

GrantUnanimous, nine to zero. The logic was the FTC Commissioners weren't purely executive officers; they were quasi judicial and quasi legislative. Congress could protect them because they weren't doing the President's bidding.

MayaOkay, so the theory was, if you're not fully executing executive power, the president doesn't get full control. That's actually a pretty clean distinction.

Speaker 4Clean in nineteen thirty five; the FTC in nineteen thirty five mostly made recommendations. Fast forward ninety years and NPR reported that the FTC now enforces and administers roughly eighty statutes covering almost every part of the economy. ME: Roberts said those tasks are "the very essence of execution of the law.

MayaSo the agency outgrew the protection it was built on.

GrantHmm.

Speaker 4That's exactly the argument Roberts ran with; and then he dropped the line that buries the whole thing: if anything more is left of Humphrey's, we overrule it.

MayaCold!

Speaker 4Six to three. Sotomayor read her dissent from the bench, which almost never happens, warning that dozens of independent commissions are now likely to become purely executive agencies.

MayaWait, so the agencies still exist?

Speaker 4Right, the FTC doesn't disappear, but as NPR noted, commissioners are now at will employees, and the bipartisan composition rules Congress built in,

MayaWow!

Speaker 4those are effectively dead too.

MayaSo if you have a subscription to some sketchy app that keeps charging you after you cancelled and the FTC is supposed to go after that company, the commissioners handling your complaint now answer directly to whoever's in the White House.

GrantWhich, if your complaint happens to be politically inconvenient, is a real problem. And it's not just the FTC. The Hill reported this covers roughly twenty two multi member agencies: NLRB, EEOC, FCC, SEC....

MayaAll of them?

GrantAll of them.

MayaMm hmm.

GrantSlaughter told CNBC she was shocked the court overturned a unanimous ninety-one year old precedent that shaped so much of the government structure. And she's the one who lived it," Trump told her she was fired because her continued service was inconsistent with my Administration's priorities. No cause, just priorities.

Speaker 3Which is exactly what Humphreys was designed to block.

GrantAnd Slaughter thought it still would. She was wrong. So that's the new rule for most agencies. But the Fed, that a different answer within the same morning, which raises the obvious question: Why?

Speaker 3So the FTC answer is settled, but the Fed got a totally different ruling-same morning, same Chief Justice-how?

Speaker 4Roberts leaned on history. The Federal Reserve Act goes back to nineteen thirteen. Congress built it specifically after the Panic of nineteen oh seven toppled something like a hundred and thirty banks. The independence wasn't an accident. It was the whole point.

Speaker 3Okay, so baked in from day one.

Speaker 4And the court found that history matters when you're defining what what forecloses removal actually requires, the Cook ruling is statutory, not constitutional. Roberts said Trump failed to give Cook notice and a chance to respond before firing her.

Speaker 3And how did Trump fire her, Grant?

Speaker 4A Truth Social post?

Speaker 3A social media post to fire a Federal Reserve governor? First one fired in the bank's entire history.

Speaker 4Right. Roberts wrote, and I'm quoting CNBC's coverage here, that Trump "failed to afford Cook the procedural protections to which he was entitled. Titled by statute.

Speaker 3So it wasn't even about whether the cause was valid; he just skipped the procedure entirely.

Speaker 4Exactly; no explanation of evidence, no deadline to respond, nothing; the court didn't rule on whether mortgage fraud counts as valid cause; that fight is still alive in the lower courts.

Speaker 3Okay, okay, okay, so she keeps her job for now, but this could come back around.

Speaker 4That's the real tension. The ruling is explicitly "for now"; the government also apparently never argued that the feds for For calls protection itself is unconstitutional; they waived that; so the Court basically assumed the protection is valid without actually deciding it.

Speaker 3Wait, so the bigger constitutional question is just still open?

Speaker 4Wide open; which is why I wouldn't call this a clean win for Fed independence. It's a procedural block on one specific firing.

Speaker 3And the dissents don't make it feel more stable, do they?

Speaker 4Not at all. Thomas dissented, saying Trump should be able to fire Fed governors at will. Full stop, but Barrett, Alito and Gorsuch dissented on procedural or technical grounds, not on the merits of Fed independence.

Speaker 3So if three dissenters didn't even weigh in on whether the Fed's protection should survive, that's a pretty thin majority for something this consequential.

Speaker 4Thin and fragile, the next case, with proper notice given, lands on completely different legal ground.

Speaker 3Which is exactly where the dissents get even messier. That's what we need to pull apart next.

Speaker 4Okay, okay! Sotomayor's dissent in Slaughter is forty-nine pages—forty-nine!—and the line that stops me cold (NPR covered it this morning) she wrote that the result is a President who emerges with far greater power than ever before-power, she said, that neither the People, Congress nor the Constitution actually granted.

Speaker 3And she read part of it from the bench. That's a statement. Justices don't do that unless they think the damage is serious. Yes. So you'd think the dissenters are a unified block pushing back, right? And, plot twist, they're absolutely not.

Speaker 4Right. Two completely different cases, two completely different dissent coalitions. In Cook, Barrett's objection was procedural. Alito and Gorsuch wanted narrower grounds. Thomas was the only one saying Trump can fire Fed governors at will, full stop.

Speaker 3So three of the four Cook dissenters weren't even arguing for gutting the Fed independence!

Speaker 4Correct; they thought the majority jumped too fast on a constitutional question the case didn't require. Barrett actually wrote, and CNBC flagged this, that the Cook majority opinion was in serious tension with Slaughter, decided the same morning!

Speaker 3The Same Morning, written by the same Chief Justice!

Speaker 4Yeah! And then Sotomayor in Slaughter called the Fed carve out an ad hoc exception. So you've got Barrett on the right saying the two rulings don't fit together, and Sotomayor on the left saying the same thing from completely opposite directions.

Speaker 3Which means the carve out protecting the Fed has critics on both flanks. That's not a stable structure, Grant.

Speaker 4I'd push back a little. Roberts knows what he built. The Fed protection is grounded in a specific historical historical tradition; the Founders' fear of monetary manipulation; he's betting that floor holds.

Speaker 3For how long, though? The Cook ruling is explicitly temporary.

Speaker 5Right.

Speaker 3Lower courts still have to decide whether Trump's stated reason—the mortgage fraud allegation that led to zero charges—actually clears the four-cause bar.

Speaker 4And that's the case to watch. If a lower court says that allegation counts as cause, the Fed's protection gets stress tested at the next level. The constitutional question Roberts punted on comes roaring back.

Speaker 3So right now, the wall protecting the Fed is a procedural floor, a fragile majority, and a lower court that hasn't ruled yet.

Speaker 4That's the math. And the agencies that don't have the Fed's historical pedigree, NLRB, FEC, EEOC, they don't even get that much cover, which is where this lands for most people's actual lives.

Speaker 3And that's exactly where we need to go. So forget the courtroom drama for a second. Let's talk about what this actually does to agencies you interact with.

Speaker 4Right, and the FTC is where I'd start. NPR reported it plainly: the bipartisan composition requirement—no more than three of five seats from one party—is now effectively unenforceable: a president fires the other party's commissioners, leaves the seats empty, and done.

Speaker 3Which is not hypothetical. According to NPR, Trump Trump already did exactly that: after firing two Democratic commissioners, the only people left on the FTC are Republicans.

Speaker 4So who reviews the next major tech merger? Who blocks this subscription scam? Commissioners who answer to the White House.

Speaker 3And it doesn't stop at the FTC. The NLRB, the EEOC, SHRM flagged this immediately after the ruling, they face the exact same

Speaker 6situation.

GrantSame dynamic. Every multi member independent agency that exercises what the court now calls executive power is subject to presidential stacking.

MayaPractically speaking, if you file a workplace discrimination claim with the EEOC, the people deciding your case now serve at the pleasure of whoever's in the Oval Office.

GrantThat's not abstract at all. That's your paycheck. That's your job.

MayaAnd that's before we even get to the Fed angle. Markets have priced in Fed independence for decades. The whole reason long-term rates stay anchored is that investors trust the Fed isn't just doing whoever the president wants.

GrantAnd right now, the Fed is already in a tough spot. Rates at three and a half to three point seven five percent held steady in June under new chair Kevin Warsh, with nine of the dot plot members projecting at least one hike this year.

MayaSo you've got an institution already navigating a genuinely Whenly difficult inflation call CNBC reported Warsh himself held off submitting a dot plot projection and on top of that you now have active litigation over whether the president can fire a sitting governor

GrantWait, hold on, because the Cook protection isn't even constitutional yet, it's procedural. The lower courts still have to decide whether Trump's stated reason-the mortgage fraud allegation that never produced charges-actually qualifies as for cause under the Federal Reserve. The Reserve Act?

MayaThat's the real number to watch, not the rate decision, that lower court ruling. Because if the court says no, that's not cause, the carve out holds. If it says yes, it counts, the whole fight reopens.

Speaker 3And you wonder why I say agency rule making is never as simple as it seems.

MayaThat's the real number to watch, not the rate decision, that lower court ruling. Because if the court says no, that's not cause,

Speaker 6the carve out holds.

MayaThe carve out holds. If it says yes, it counts, the whole fight reopens.

Speaker 3So the independence of the institution that sets your mortgage rate hinges on a judge deciding whether an allegation that went nowhere counts as grounds for termination.

MayaThe math on that should make everyone a little nervous. Coming up, we run the check or no check on whether any of the oversight mechanisms here actually worked. All right—check or no check, I'll go first. The court functioned as a partial check today; the Fed carve out is real. CNBC reported the five-four majority explicitly refused to let Trump remove Cook without notice and a chance to respond that held fair

Speaker 3But Grant-partial! that word is doing a lot of lifting.

Mayabecause Humphrey's Executor is gone ninety-one years of structural protection for independent agencies NPR called it the primary check on executive overreach stripped out in a six-three ruling Congress never legislated a replacement-so partial check, hard stop.

Speaker 3My read: no check, or a check with an expiration date, which is basically the same thing. The for now in the Cook ruling is the whole story. The case goes back to a lower court. No lower court has actually found the facts yet on whether mortgage fraud allegations count as valid cause under the Federal Reserve Act.

MayaRight. And Kavanaugh spelled it out in his concurrence: "The ultimate decision on whether Trump can remove Cook will, quote, largely depend on the facts.

Speaker 3The facts, meaning a lower court judge still has to decide if what Trump actually alleged-that Cook misrepresented a property as a primary residence to get better mortgage terms-clears the legal bar for cause.

MayaAnd Cook's own statement after the ruling was pretty direct. She said: And,"

Speaker 6quote,

Maya"this was never about mortgage documents." She's calling it a manufactured pretext for political pressure over interest rates.

GrantWhich is exactly the kind of thing a court is going to have to sort out on the facts: did Trump have actual cause, or did he dress up a rate policy dispute in mortgage fraud clothing?

MayaSo the concrete question, the one that determines whether the Fed carve out holes or blows up,

Speaker 6is this:

Mayais whether those mortgage allegations actually constitute cause under the nineteen thirteen Federal Reserve Act. That ruling is coming from a lower court.

Speaker 3And no one has answered it yet. That is where this whole thing lands: check or no check, we don't actually know. We find out when that lower court rules.

MayaWhich is either the most unsatisfying answer in constitutional law or exactly how the system is supposed to work.

Speaker 3I'm going with unsatisfying. For now.

MayaAll right, that's Power Check for today; and honestly, Roberts writing both of those opinions on the same morning is still the thing I keep coming back to.

Speaker 3Same- expand it with one hand, pump the brakes with the other- same morning!

MayaThe Humphreys executor piece sticks with me ninety one years of precedent, gone, and Congress hasn't moved an inch toward replacing the structural guard rail it just lost.

Speaker 3And the Cook ruling, blocked, but the lower courts still has to answer the real question. That's not a wall, that's a waiting room.

MayaWhich basically sums up where oversight sits right now.

Speaker 3If this episode helped you understand what actually changed today, share it with one person who cares. Follow us wherever you listen, and a review genuinely helps others find the show.

MayaWe'll be back next week. Thanks for keeping tabs on Power With Us.

Speaker 3And that's The Rundown.