President Trump does not have a free‑wielding legal authority to fire Federal Reserve Chair Jerome Powell for policy disagreements or political reasons. The legal framework is clear: under the Federal Reserve Act and Supreme Court precedent, the Fed Chair can only be removed “for cause”, which generally means serious misconduct, inefficiency, neglect of duty, or inability to perform the job—not simply over disagreement about interest rates.

What “for cause” means legally

The Federal Reserve Act allows the President to remove a Fed governor—including the Chair—only for cause.

Historically, “for cause” follows the standard set by Humphrey’s Executor v. United States (1935), which covers serious misconduct or dereliction of duty, not policy differences.

Supreme Court guidance and legal precedents

A recent Supreme Court ruling confirmed that Fed Chairs are protected from arbitrary removal, even though certain other agency officials may be dismissed more freely.

Legal experts likewise emphasize that firing a Fed Chair over policy decisions is unlawful and could jeopardize the Fed’s independence.

Could Trump fire Powell based on renovation issues?

Some reports suggest Trump might frame a firing as justified due to alleged mismanagement of a costly Fed headquarters renovation . However, even accusations of “overspending” or procedural errors would still need to rise to the level of misconduct, inefficiency, or neglect—criteria far more stringent than mere policy disagreements or cost overruns.

The Practical Constraints

1. Legal challenge: Powell would almost certainly sue if dismissed, leading to a protracted legal battle.
2. Market impact: Financial markets reacted negatively already to firing rumors .
3. Political backlash: Congressional leaders across the political spectrum have defended the Fed’s autonomy

Sources and Citations

Legal Basis for the Federal Reserve Chair Appointment and Removal

The Federal Reserve Act of 1913

Statutory source: “The President shall have power, by and with the advice and consent of the Senate, to appoint… members of the Board of Governors… The Chairman and Vice Chairman of the Board shall be selected by the President from among the members… for a term of four years.”

No provision is made for the President to remove the Chair at will. Source: 12 U.S.C. § 242 Federal Reserve Act – 12 USC § 242

Legal Scholarship and Analysis

Can the President Fire the Fed Chair?

Legal analysis by Harvard Law: “Removing the Fed Chair is not like firing a Cabinet secretary. The law doesn’t provide for at-will termination. The Fed is designed to be independent, and removing a chair without cause would be legally dubious.” Source: Harvard Gazette, 2025

Supreme Court: One Man Trump Can’t Fire

Article referencing Seila Law LLC v. CFPB (2020): “While the Court loosened the president’s power to remove some agency heads, the Fed’s structure—with for-cause protections—was left intact.” Source: Daily Beast, July 2024

Congressional Research and Commentary

Congressional Research Service (CRS) Reports: “The President has the authority to appoint, but not to remove, the Chair of the Federal Reserve Board except for cause.” Source: CRS Report on the Federal Reserve Board Structure

Reporting on Trump-Powell Conflict

Trump Asked GOP if He Could Fire Powell

Report on Trump exploring ways to justify firing Jerome Powell, including Fed building renovations: “Trump has privately floated firing Powell or finding a reason to remove him, but was advised it would face serious legal obstacles.” Source: CBS News, July 2024

MarketWatch on Trump and Powell

Analysis on the risks of firing Powell: “Attempting to remove Powell would be seen as a blow to Fed independence and could roil financial markets.” Source: MarketWatch

Constitutional Precedent

Humphrey’s Executor v. United States, 295 U.S. 602 (1935) The Supreme Court ruled that Congress could limit the President’s power to remove officials of independent regulatory agencies (like the Fed) to “for cause” only. Source: Full Text – Justia US Supreme Court

Categories: Robert Clifton Robinson