TLDR
- President Trump has asked the Supreme Court to let him fire top officials at independent agencies, potentially affecting Federal Reserve Chair Jerome Powell
- The case challenges a 1935 Supreme Court ruling that allowed Congress to shield high-ranking officials from being fired
- Trump and Powell have conflicted over interest rate policies, with Trump wanting cuts following market disruption caused by new tariffs
- The Supreme Court’s decision could increase White House control over federal regulators and independent agencies
- Trump’s tariff policies caused market volatility, with crypto markets seeing 10-20% drops and $888 million in liquidations on April 7, 2025
President Donald Trump has asked the US Supreme Court to allow him to fire top officials at independent agencies, a move that could have major implications for Federal Reserve Chair Jerome Powell.
The emergency request follows Trump’s attempts to remove officials from two other independent agencies and could expand White House control over federal regulators.
The legal challenge targets a 1935 Supreme Court ruling known as Humphrey’s Executor. This ruling has allowed Congress to protect high-ranking officials from being fired and paved the way for independent agencies across the US government.
The case began when Trump fired National Labor Relations Board member Gwynne Wilcox and Merit Systems Protection Board member Cathy Harris. Both officials are fighting to keep their jobs while the legal battle continues.
Trump’s administration has asked the Supreme Court to take the unusual step of granting full review without waiting for a final ruling from the appeals court. They’ve requested a special sitting in May so the case can be considered in the current term.
Powell-Trump Conflict Intensifies
The conflict between Trump and Powell isn’t new. Powell’s tendency to keep interest rates high to control inflation has long frustrated Trump. Though Trump said in December 2024 he wouldn’t try to make Powell go, the situation has changed.
Trump’s recent tariff policies have caused market turmoil. On April 2, 2025, Trump deployed tariffs on dozens of countries on what was called “Liberation Day.” This led to stock markets experiencing their worst drops in decades on April 7.
Crypto markets weren’t spared, falling 10 to 20 percent on April 7. Crypto liquidations reached around $888 million that day. The fear greed index reached “extreme fear” following these events.
Trump has shown no regrets about the market impact. In February, he warned about the “pain” tariffs might bring to Americans, calling it a price for America’s future prosperity.
Supreme Court Decision Could Reshape Federal Governance
The Supreme Court has already limited the Humphrey’s Executor ruling in recent years. In 2020, the court said the president could fire the director of the Consumer Financial Protection Bureau for any reason.
The key question now is whether the same reasoning applies to multi-member agencies like the Federal Reserve. If the Supreme Court overturns or limits the 1935 precedent, it would give Trump more power over independent agencies.
Trump’s attempt to gain control over the Fed comes as inflation in the US has shown signs of dropping. Despite this positive news, Trump wants interest rate cuts to help recover from recent market volatility.
Powell sees no reason to cut rates and wants to focus on controlling inflation. On April 4, he said central banks should first assess the impact of Trump’s trade policy changes before making any moves.
Powell has stated he will not resign until the end of his term in May 2026. If Trump succeeds in his Supreme Court challenge, he might appoint someone more aligned with his policies, such as Kevin Warsh, who might be more pro-crypto.
Lower interest rates could trigger inflation, which might boost Bitcoin prices in the short term. Trump’s overall crypto-friendly policies are already seen as positive for Bitcoin and other cryptocurrencies.
