Can The President Actually Remove a Federal Reserve Board Member?

Amid frustrations with Federal Reserve Chairman Jerome Powell’s unwillingness to lower interest rates, U.S. President Donald Trump has repeatedly threatened to remove Powell from his position as chairman in spite of the longstanding American value of central bank independence. Although Trump is not the first president to pressure a Federal Reserve chair while in office, direct threats of removal constitute a complex legal dilemma that has piqued the interest of many legal scholars aiming to answer the question: can the president actually remove the Federal Reserve chairman? 

Trump appointed Jerome Powell as Federal Reserve chairman in 2017, an enormously significant appointment for the United States as the Federal Reserve wields a great deal of power and influence over the U.S. economy and, consequentially, the world economy. The federal reserve is considered to be the largest central bank in the world (SWFI), and has the power to set the federal funds rate, which determines the rate at which banks and financial institutions can borrow money overnight (Federal Reserve). Altering the federal funds rate is typically accompanied by a change in interest rates and financial conditions as a whole for the country, meaning that the Federal Reserve is one of the most impactful financial institutions in the entire world, often tasked with curbing inflation and stimulating the U.S. economy. 

Given the immense amount of authority and responsibility the Fed holds, congress determined upon its inception that it should be an apolitical agency operating independently from the wishes of politicians in order to reflect the most effective economic policy (McNeil 2025). Granted, the Federal Governors appointed to the board undoubtedly have their own personal ideas about economic policy that may be grounded in personal political ideology, but the design of the agency was specifically defined in a manner intended to remove political pressure from decisions regarding economic policymaking. Research has even demonstrated a clear correlation between central bank independence and inflation, indicating that more political pressure placed on a central bank tends to result in higher inflation rates (Klein 2025). 

In spite of the design of the Federal Reserve intending to deter Presidents from using the agency as a means to promote their own political agenda, Trump is not the only president who felt it necessary to pressure the sitting Fed chair while in office. Most notably, Richard Nixon voiced concerns about Fed chairman Arthur Burns’ financial policy in 1972 due to worries about a potential recession hurting his re-election campaign (McNeil 2025). Although he may not be the first, Trump has entered unprecedented territory by publicly calling for the removal of Powell and his fellow governing board member Lisa Cook (Horsley 2026). Trump’s disagreement with Powell is solely over policy concern, as he has frequently expressed frustration with interest rates not being lowered enough. In a 2025 Truth Social post Trump tore into Powell further, calling him “always TOO LATE AND WRONG”, and then noting that his “termination cannot come fast enough!” (Horsley 2025). While these remarks are certainly inflammatory, the legality of removing Powell is far more challenging.

Contrary to popular belief, The Federal Reserve Act does allow the president to remove a Federal Reserve chair or board member, but only under the condition of real statutory grounds for removal. The Federal Reserve Act stipulates that the President is only able to terminate a Federal Reserve chair for cause as defined by a statute, upheld by often cited Supreme Court ruling Humphrey’s Executor v. United States (1935). The Supreme Court upheld Congress’s ability to limit presidential removal powers for officials of independent agencies, cementing that removal for cause is the only instance in which the president has any authority to end the term of officials from independent agencies(Manners & Menand, 2021). Although the ruling does not specify exactly what “cause” refers to, it is generally understood to mean misconduct, malfeasance, or neglect of duty(Manners & Menand 2021). 

While this ruling has stood the test of time, there is some legal precedent to suggest that the issue is not quite as black and white as it may appear at first glance. Seila Law LLC v. Consumer Financial Protection Bureau (2020) is a key supreme court case that decided the President “must” be able to remove the head of the Consumer Financial Protection Bureau (CFPB) “at will” (Patel et al., 2020), a much different stance than the Humphrey’s Executor v. United States (1935) decision. Although this more recent ruling seems to lend itself to the interpretation that a president has full capacity to remove a member of an independent agency, the court did not hold that this case extended to all independent agencies. Rather, the structure of the CFPB was as a single member board with what the court deemed to be “considerable executive power”(Patel et al., 2020), and the ruling was meant to sever the protection of single director government agencies who operated with full autonomy. 

With these landmark cases in mind, from a legal precedent standpoint there is currently no argument to be made that a president has the authority to remove a Federal Reserve Chair at will and without cause. Considering the provisions included within the Federal Reserve Act however, it is not outside the realm of possibility that the understanding of “cause” could be defined differently by a judge, leading an uncooperative Fed chair to see their term cut short. But barring a revisitation of the Humphrey’s Executor decision, a new landmark case, or congressional agreement to change the Federal Reserve Act; removing an officer of an independent agency is not legally possible without serious cause. To return to the recent statements from President Trump, unless further developments occur, or a cause other than policy disagreements is discovered, the American people can rest assured that Jerome Powell’s job is safe.

References:

Horsley, Scott. “What to Know about Trump’s Ugly Feud with the Federal Reserve.” NPR, January 13, 2026. https://www.npr.org/2026/01/13/nx-s1-5674777/trump-federal-reserve-jerome-powell. 

Horsley, Scott. “Trump Calls for Fed Chair Jerome Powell’s ‘termination’ in Blistering Attack.” NPR, April 17, 2025. https://www.npr.org/2025/04/17/nx-s1-5367696/trump-jerome-powell-federal-reserve-economy-tariffs. 

Klein, Michael. “Leaning on the Fed (Updated).” Econofact, February 4, 2025. https://econofact.org/leaning-on-the-fed-updated. 

“Largest and Global Sovereign Wealth Fund Institute.” SWFI. Accessed February 1, 2026. https://www.swfinstitute.org/fund-rankings/central-bank. 

Manners, Jane, and Lev Menand. “The Three Permissions:Presidential Removal and the Statutory Limits of Agency Independence.” Columbia Law Review, February 3, 2021. https://columbialawreview.org/content/the-three-permissionspresidential-removal-and-the-statutory-limits-of-agency-independence

“Monetary Policy.” The Fed Explained - Monetary Policy. Accessed February 1, 2026. https://www.federalreserve.gov/aboutthefed/fedexplained/monetary-policy.htm. 

McNeil, Taylor. “What’s the Federal Reserve and Why Is Its Independence Important? | Tufts Now.” TuftsNow, September 11, 2025. https://now.tufts.edu/2025/09/11/whats-federal-reserve-and-why-its-independence-important. 

Patel, Nihal, Rachel Rodman, and Scott Cammarn. “Supreme Court Holds That CFPB’s Structure Is Unconstitutional.” The Harvard Law School Forum on Corporate Governance, July 20, 2020. https://corpgov.law.harvard.edu/2020/07/20/supreme-court-holds-that-cfpbs-structure-is-unconstitutional