Is President Donald Trump OK Grasp control over the Fed It seems to be entering the final game. The Supreme Court is likely to controversy on Monday night or Tuesday.
If the court is related to Trump, it will be one of the most important economic policy decisions in the history of the federal judiciary. It may have Disastrous consequences For investors and the U.S. economy, both broadly.
The Fed is one of several federal agencies labeled as presidential “independence.” Although the president chooses people who will serve on the Fed’s board, these governors must be confirmed by the Senate, they must be confirmed by Term of office 14 years. By law, the president can only remove a member of the Fed’s board of directors.reason,” unlike most agent leaders who serve in presidential pleasures.
However, the Republican majority in the Supreme Court adheres to a kind of “Unified execution“It is unconstitutional to claim that Congress aims to protect agent leaders from presidential control. If you care about the details of the theory, I written More Interpreter On the above, the point I can calculate is that the essence of the Constitution is to take all the “executive” powers into the hands of the President. Therefore, the head of any authority believes that the court considers itself to be the essential “execution” of “execution” and the president must open fire at will.
Republican judges have had one for most of the past two decades Slowly Extended The president’s authority to fire officials based on this theory. And them Kick this process to speed Shortly after Trump took office in his second term. However, in the May ruling, the court did show that it was Frightened Regarding the power to fire the Federal Reserve members.
Despite possible decisions from the court Trump v Wilcox It is mysterious and it is not difficult to figure out why some judges are suffering from Trump’s loyalty and unified implementation theory on the one hand, but are eager to maintain a beautiful independence from the other.
The Fed has essentially the right to inject cocaine into the U.S. economy. When the Fed lowers interest rates, it makes it easier for businesses to borrow money and can be used to start new projects and hire new workers. But this also has the potential to increase inflation. So if the president controls the Fed, he can provide short-term, politically favorable promotion to the economy, but at the expense of greater economic turmoil.
This concern is not just a hypothesis. Prior to re-election campaign in 1972, President Richard Nixon Successfully put pressure on the Fed’s chair Arthur Burns to lower interest rates. As a result, the economy flourished and Nixon won the historic landslide. But in the 1970s, Burns’ surrender was often accused of years of “stagnation”, slow economic growth and high inflation.
In any case, the lawsuit is called Cook v Trump Now heading towards the Supreme Court, it is likely to land immediately at the Justice’s door on Monday night. Trump has asked the court to weigh the case on a very accelerated basis, hoping that he can fire the Fed governor before the start of a major Fed meeting on Tuesday.
At the time of writing, chef It is being tried in the Federal Court of Appeal. Trump asked the court to make a decisionBusiness ends on Monday, September 15, 2025. “But if the appeals court fails to comply with the appeals court, Trump will almost certainly bypass the Supreme Court’s review before the Fed meeting on Tuesday and seek the Supreme Court’s review.
So, it is likely that we will soon find that the Republican majority in the court intends to put the Fed under Trump’s control.
What is it Cook v Trump about?
Last month, Trump Trying to fire Lisa chefa member of the Federal Reserve Board of Directors appointed by Joe Biden in 2022.
Trump claimed he fired her because she allegedly committed mortgage fraud by claiming that she had two separate properties as her primary residence, so he was firing her “for reasons” – but that was an obvious excuse. Trump makes similar charges Several political enemies against himincluding Senator Adam Schiff (D-CA) and Democratic New York Attorney General Letitia James. And, anyway, the allegations against Cook were later found to be wrong.
Last week, Reuters reported Cook Announced one of the two properties as a “vacation house”, So the lender who helped her purchase the property realized that it was not her primary residence.
Despite this, Trump claimed he was allowed to fire. Trump’s lawyer argued in a summary filed by the federal appeals court that the president’s false judgment on Cook committing mortgage fraud”Not subject to the second guess of justice”, so, even with transparent excuses, no court can stop Trump from expelling her.
Under Trump’s legal theory, he could fire Cook by accusing her of being responsible for the “reason”. Assassination by President James Garfield in 1881may lead to the fall of Rome. Trump has asked the court to neutralize all laws that protect the Fed’s governor from political dismissal.
Trump’s ruling last May is placed in the form of Trump Wilcoxwhich shows that the Fed is not exempted from a unified theory of enforcement and that Trump may not fire its leaders at will.
Admittedly, Opinion Wilcox It’s Gobbledygook. It claims the Fed is special because it is “a unique, quasi-private entity that follows the unique historical tradition of the first and second banks in the United States”, whatever it means. Many legal experts, Including the Republican chief judge The Sixth Circuit Court of Appeals is questioning whether there is indeed a principled way to distinguish the Fed from other independent institutions.
However, ultimately, the question of whether the court decides Wilcox The difference based on principle is academic. The court often puts it down strangeness or Difficult to understand Decisions and these decisions are no less binding than reasonable legal reasoning.
Importantly, just four months ago, the court issued a ruling that showed Trump could not fire members of the Fed’s board of directors. If a Republican judge withdraws the course after a recent decision, either pass a veto Wilcox To clarify or by defining the word “cause” in a narrow sense, that it becomes meaningless, has not only had a surprising impact on the U.S. economy.
It is also an unusually loud signal that the court has decided to become Wholly owned subsidiary Trump Organization.
