In Trump’s taunt at Fed chief, real aim could be a 1935 precedent that keeps US institutions independent

On Thursday (April 17), US President Donald Trump lambasted Federal Reserve Chair Jerome Powell, writing on his Truth Social platform: “‘Too Late’ Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!’"

He added, “Powell’s termination cannot come fast enough!"

Ironically, it was Trump himself who nominated Powell to lead the Fed in 2017. Then in 2021, he was re-nominated by then-President Joe Biden. His term is scheduled to end next year in May but Trump wants him out and even insists that he has the power to do so.

During a meeting with Italian Prime Minister Giorgia Meloni, Trump said, referring to Powell, “Oh, he’ll leave. If I ask him to, he’ll be out of there." But Powell continues to strike a defiant tone. Earlier, he declared he won’t step down even if Trump asked him to do so. He also highlighted that presidents don’t have the power to fire or demote the Fed chair.

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Trump, through his statements, has made it clear he doesn’t believe in independence of federal agencies and want to have his way. Even his actions reflect a similar sentiment. For instance, Trump this week removed two Democrats from the board of the National Credit Union Administration (NCUA), a financial regulator that oversees credit unions across the US.

The move follows a similar decision in March, when the White House dismissed two Democratic commissioners from the Federal Trade Commission (FTC), an agency that traditionally functions as an independent, bipartisan body. These firings are part of a growing trend under Trump’s administration to reshape federal agencies by replacing long-standing bipartisan structures with more loyal appointees.

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Even in January, just days after assuming office, he fired two Democratic officials at the National Labor Relations Board. Trump removed NLRB Member Gwynne Wilcox and General Counsel Jennifer Abruzzo, appointees of Biden.

Just days ago, it was reported that Internal Revenue Service (IRS) is mulling revoking Harvard’s tax-exempt status in what would be a probably illegal move. This comes after Trump called for the university to lose its tax-exempt status.

“Perhaps Harvard should lose its Tax Exempt Status and be Taxed as a Political Entity if it keeps pushing political, ideological, and terrorist inspired/supporting ‘Sickness?’ Remember, Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!” the US president said in a post on his Truth Social platform.

Now, the IRS’s move further reflects Trump’s assault on the independence of agencies and even institutions of higher education.

Trump challenging 1935 precedent

Trump’s actions and statements reflect a broader campaign of his administration to directly challenge a 1935 precedent set by the US Supreme Court, which insulated federal agencies from political influence.

The ruling upheld Congress’s authority to create independent federal agencies whose board members could only be forced out before their terms expired “for cause.”

“The fundamental necessity of maintaining each of the three general departments of government entirely free from the control or coercive influence, direct or indirect, of either of the others has often been stressed, and is hardly open to serious question,” the ruling said.

With this landmark judgment, the Supreme Court then barred president Franklin D. Roosevelt from firing the then-Federal Trade Commissioner.

Will Supreme Court now act to uphold the 1935 ruling?

The Supreme Court’s recent decisions reflect a clear shift toward expanding presidential authority over independent federal agencies. Although in the past, the Court upheld rules that protected agency officials from being removed without cause, the current 6–3 conservative majority has started to roll back those protections. In recent rulings, the Court found that shielding the heads of some independent agencies—especially those with a single director structure—from being fired by the president violates the Constitution’s separation of powers.

And that’s why, the SCOTUS ruled in 2020 that the Congress can’t insulate the head of the Consumer Financial Protection Bureau from presidential removal because, unlike the head of these multi-member commissions, the head of the CFPB is a single person.

Conservative legal thinkers argue that the president, as the head of the executive branch, must be able to remove agency leaders freely to ensure they are accountable to the voters through their elected leader.

Critics of this view warn that it undermines the independence of agencies meant to operate outside political influence, such as the FTC or the NCUA. The rulings signal that more independent regulatory bodies could soon face similar challenges to their structure and leadership protections.