How the Supreme Court Enabled Trump's Move Against Jerome Powell

Chief Justice Roberts should consider issuing an apology to Jerome Powell.

On a recent Sunday evening, Jerome Powell, who heads the Federal Reserve, announced that he is now under criminal investigation by the Trump administration. The stated reason revolves around a disagreement concerning renovations at the Federal Reserve's headquarters. However, the underlying motive appears to be President Trump’s intent to replace Powell with someone more in line with his policy objectives.

Appointed by Trump in 2018, Powell was tasked with leading the Federal Reserve. However, Trump's views on Powell soured as the president desired more rapid interest rate cuts than the Fed was implementing.

Understanding the Supreme Court's Role

The Federal Reserve operates independently of the president by law. Fed Board members can only be dismissed by the president for specific reasons. This independence is crucial since the Fed can stimulate short-term economic growth, enhancing a president’s reelection prospects, albeit possibly causing long-term economic instability.

Consider the 1972 elections when President Nixon convinced Fed Chair Arthur Burns to lower interest rates, temporarily boosting the economy and contributing to Nixon's electoral victory. However, this decision later brought about a period of 'stagflation' with slow growth and significant inflation.

Economist Justin Wolfers from the University of Michigan voiced concern, remarking to the BBC that undue pressure on a central bank to slashes interest rates is comparable to the tactics of authoritarian rulers before causing hyperinflation. He drew parallels with situations in countries like Venezuela, Russia, and Zimbabwe.

Historically speaking, the Supreme Court has expressed a desire to avoid a repeat of the 1972 scenario. Although the Republican majority generally supports extensive presidential power over federal appointees, they acknowledged in May that the Fed's distinct heritage warrants protection from presidential encroachments.

Trump's Leverage and the Supreme Court’s Influence

Nonetheless, the Republican justices have paved the way for Trump’s current actions against Powell. In the notorious 2024 Trump v. United States decision, the justices essentially affirmed that Trump could exploit executive powers as he sees fit, including targeting political adversaries.

The current situation with Powell isn’t an isolated instance; it’s permitted by the Supreme Court’s rulings. They collectively endorsed the notion that Trump can initiate flimsy investigations against his rivals without facing any repercussions.

The Legal Grounds Facilitating Trump's Actions

The debates surrounding both the Federal Reserve's autonomy and Trump's legal immunity are rooted in the same judicial principle.

The idea of a 'unitary executive' suggests that the president holds certain definitive powers that aren't reducible by either legislative or judicial bodies. Prior to Trump's indictment over his unsuccessful challenge to Biden's 2020 electoral win, the Supreme Court generally used this theory to debate the president's firing powers concerning federal officials.

Supporters of this theory advocate for agency heads being directly answerable to the president, which implies the president should have unfettered dismissal rights. This concept poses challenges to laws safeguarding the Fed’s leadership from arbitrary removal. Despite the Supreme Court's Republican justices endorsing a unitary executive, they recognized in the 2025 Trump v. Wilcox that special consideration is warranted for the Fed.

Their rationale? The Fed is a uniquely structured body, aligning with the early national banks like the First and Second Banks of the United States. Although their reasoning is scant and perhaps perplexing, Wilcox should protect Powell due to its Supreme Court basis.

The Supreme Court’s Complicity

Trump's ability to initiate dubious investigations against political figures stems from the Republican justices' decision to empower him. This decision, anchored in the unitary executive doctrine, maintains that crime investigation and prosecution are inherently executive functions.

What exacerbates this power is the Court's conclusion that the president can execute 'sham' investigations for impure motives. Chief Justice Roberts asserted that presidential directives regarding the Justice Department's actions remain under presidential authority, even if these directives serve ulterior purposes.

Thus, the justices declared Trump immune from prosecution concerning his communications with Justice Department officials.

In summary, the Court laid the groundwork for Trump to wield presidential powers for actions potentially described as criminal, including sham prosecutions.

Justice Roberts and his panel should not be shocked by Trump’s use of this authority against Powell. There should be accountability considering the Supreme Court empowered such possibilities.

A silver lining is the Court's capacity to reverse this scenario. In the upcoming Trump v. Cook, the justices have an opportunity to challenge and potentially overturn the Trump immunity precedent.

If, however, the Court's Republican majority fails to act, they may find themselves in Trump’s crosshairs, armed with his judicially sanctioned powers against perceived adversaries, real or imagined.