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Highlights
- A senior adviser to President-Elect Trump recently said Trump was likely to let Jerome Powell serve out his term as Federal Reserve Chair, ending in May 2026.
- Harvard Law Professor argues that Trump has legal authority to remove Jerome Powell and Gary Gensler.
- Trump has criticized Powell's leadership and sought more transparency at the Federal Reserve, but Powell has resisted calls for resignation.
A senior adviser to President-Elect Trump recently said Trump was likely to let Jerome Powell serve out his term as Federal Reserve Chair, ending in May 2026. Speaking on condition of anonymity, the adviser related that Trump had earlier said, “I would let him serve it out especially if I thought he was doing the right thing.”
This would perhaps indicate that, against an earlier declaration of hostility, Trump might decide not to pursue the removal of Powell from office.
Donald Trump to Keep Jerome Powell as Fed Chair Until 2026
A senior advisor close to President-Elect Trump recently revealed that Trump is likely to allow Federal Reserve Chair Jerome Powell to complete his term, which ends in May 2026. The advisor, who requested anonymity, shared that Trump had previously stated, “I would let him serve it out especially if I thought he was doing the right thing.” This statement suggests that despite earlier criticism, Trump may not seek to remove Powell from his position.
This first came into focus in July when President-elect Trump announced his desire to reappoint Jerome Powell for five years. Such a move is mainly behind Trump’s economic team, and this supports Powell’s policy regarding interest rate cuts, but there are concerns over a possible change in Trump’s decision.
Powell responded strongly to the possibility of being fired by Trump, “Not permitted under the law,” reiterating his belief in the rule of law of the land. Powell has been at the pivot of the Fed leadership since his appointment by Trump in 2018 and reappointed for a second term by President Biden.
Despite Powell’s solid performance, many speculate that former Goldman Sachs executive and critical economic policy director Gary Cohn may turn down the job of Fed chief because he is against the steel tariffs, a policy very dear to Trump in the first term.
Presidential Power to Remove Jerome Powell, Gary Gensler – Legal Expert Weighs In
Although Donald Trump has repeatedly attacked both Federal Reserve Chair Jerome Powell and SEC Chair Gary Gensler-even hinting that he might remove them-it’s generally assumed that he lacks legal grounds to remove these confirmed officials in the absence of legal wrongdoing on their part.
But Harvard Law Professor and high-profile conservative jurist Adrian Vermeule disagrees. In fact, says Vermeule, Donald Trump does have the legal authority to remove both Powell and Gensler from office.
Even though some legal precedents implied that independent agency leaders are not easily removable without cause – there are counter arguments as well.
Vermeule, former ACUS member and influential conservative jurist, , cited Article II’s removal power in the U.S. Constitution. This grants the President power to appoint and remove officers, with Senate consent.
Reminder — when discussing removal issues, don’t leap straight to the constitutional issues; check the statutes first. pic.twitter.com/Ci8iUavUtI
— Adrian Vermeule (@Vermeullarmine) November 9, 2024
This includes positions like Ambassadors, Supreme Court judges, and other U.S. officers appointed by law. However, Congress can assign the appointment of “inferior officers” solely to the President, the courts, or department heads.
Vermeule bases his conclusions on the landmark Myers v. United States case. In 1926, an 1876 law required the President to appoint and remove postmasters of the first, second, and third classes with Senate approval.
On the contrary, the President, Woodrow Wilson, removed Frank Myers, a first-class postmaster, without Senate approval.The Supreme Court ruled in Wilson’s favor, affirming the President’s sole power to remove executive officials without Senate consent. This decision strengthened the doctrine of presidential removal power, which could apply to officials like Jerome Powell and Gary Gensler.
Historical Debates Revived in Recent Cases
The current debates on presidential removal powers, applied to officials like Jerome Powell and Gary Gensler, have historical roots.
The Myers v. United States case established that the President can remove officers at will. This rule has an exception, where Congress limits removal power by vesting inferior officer appointments in department heads instead of the President.
Historically, this principle of removal has been tested and evolved through complex cases, including Morrison v. Olson and Seila Law, which highlighted ambiguities and limitations regarding the removal of inferior officers. This unresolved area of constitutional law has become current in debates over whether President Trump can remove Federal Reserve Chair Jerome Powell and SEC Chair Gary Gensler.
Some legal scholars continue to believe, as James Madison first argued, that the President should have unfettered removal power over officers who wield executive power at his direction because such a “chain of dependence” is necessary to assure accountability on the part of the executive. The view is that if the principal officers, for instance, agency heads, can be removed by the President. Inferior officers should also exercise executive authority vested solely in the President.
Trump Eyes Transparency Overhaul at Fed, Clashing with Powell’s Leadership Style
Jerome Powell was reappointed by President Biden for a second term as Federal Reserve Chair, after being appointed by Trump in 2018. A private equity veteran, Powell has led the Fed through various economic challenges, though his management angered Trump, particularly regarding transparency.
Donald Trump reportedly discussed with the Fed his desire for live-streamed meetings and faster releases of meeting minutes, aiming to provide the public with quicker access to policy discussions.
Powell recently said that he would not step down if asked by President-elect Donald Trump. When asked directly, Powell replied, “No.” He further clarified that the president lacks the authority to fire or demote him, reinforcing his stance on the independence of the Federal Reserve. On the other hand, Gensler’s resignation is wanted by many more political actors. Just recently, the American Securities Association (ASA) recently called for his immediate resignation.
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