If the Fed Is Not Executive, What Is It?

National Review Online

Tuesday, June 30, 2026

 

The Supreme Court decided two big cases Monday on the president’s power to remove executive branch officials. Chief Justice John Roberts, who wrote both decisions, only got them half-right. In Trump v. Slaughter, the Court very properly concluded that the Constitution puts the president, and only the president, in charge of the executive branch, and therefore the president must be able to fire anyone (other than the vice president, who is independently elected) who runs an agency with executive powers. In Slaughter, that meant the head of the Federal Trade Commission. The pity is that we have a Federal Trade Commission.

 

In Trump v. Cook, the Court surprised Court-watchers by not only doing the expected thing and blocking Donald Trump from removing Federal Reserve Governor Lisa Cook, but also going further to create a special rule just for the Fed: Congress can, but doesn’t have to, restrict the president from removing the governors.

 

Slaughter is good law and good policy. It restores how the executive branch was understood to work before the 1935 case Humphrey’s Executor (which the Court overruled in Slaughter) distorted it. It also finally settles in Andrew Johnson’s favor the constitutional question over which he was impeached in 1868. We don’t doubt that Donald Trump and his successors may use this power imprudently at times, but the president acquires that power through politics, and the remedy for its misuse is political. That’s democracy.

 

Cook is another matter. Trump tried to comply with the law restricting Cook’s removal by alleging that she had committed mortgage fraud and thus could be removed “for cause.” He didn’t argue, as in Slaughter, that he had the power to remove her at will. For once, Trump listened to shrewd legal advice from good lawyers, and the Court hung him with it. Did it even need to? Trump’s campaign to bend the powers of his office against Cook and Jerome Powell in order to get cheaper money is bad monetary policy, shameful abuse of his prosecutorial powers, and an ominous precedent. For the moment, however, Congress seems to have stopped him, and done so by means of its traditional leverage over appointments.

 

Roberts and Brett Kavanaugh, who joined the three liberals to make a 5–4 majority in Cook, were quite blunt in emphasizing their view that the Fed is essential. But the Constitution contains no “too big to be illegal” clause.

 

There is a great deal to be said in favor of an independent central bank, and there would be still more to be said if Congress gave the Fed fewer powers and a narrower, more focused mandate to keep the currency stable and predictable. But there are also downsides to an independent Fed: If we’ve had fewer financial crises and depressions on the Fed’s watch, we have not had zero, and there’s nobody to hold accountable when they happen. Moreover, any government agency that needs answer to nobody is prone to mission creep.

 

More to the point, as Justice Clarence Thomas wrote, “If the Court prefers an independent Federal Reserve Board, then its issue is not with the President but with the Constitution.” The Founders may have concluded that a central bank free of political pressure was necessary, and Alexander Hamilton may have won the argument with James Madison that the Constitution empowers Congress to create a central bank — but we know very well that they typically preferred to strike the separation-of-powers balance in favor of democratically accountable branches that were checked by other branches. When they wanted to create a truly independent branch, as they did with the judiciary, they did so explicitly. They could have put an independent central bank in the Constitution; if we want to secure one, we still could. As things stand, the Court’s decision wouldn’t stop Congress if it decided to end the Fed’s independence.

 

If the president controls the executive branch, and doesn’t control the Fed, then what is the Fed? It’s not a legislature, because Article I creates only two houses of Congress. It’s not a court. The Constitution doesn’t mention a fourth branch. But now we have one.