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The Federal Reserve has emerged as the 800-pound gorilla in the legal fight over President Trump’s firings of agency leaders traditionally independent from the White House.

The Supreme Court’s 6-3 conservative majority is increasingly signaling it wants to eviscerate precedent that has protected certain federal agency leaders from at-will termination by the president for nearly a century.

But even as the justices eye the major expansion of presidential power, they are taking great care to shield the Fed, rejecting the notion that the court will imperil the institution's independence.

“The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” the court stressed in an emergency ruling last week.

Trump has long flirted with firing Fed Chair Jerome Powell over frustration that he has not brought interest rates down quicker.

Last month, Trump said Powell’s “termination cannot come fast enough”, only to say days later he has “no intention” of firing the central banker.

But the White House acknowledges it is studying the issue and Trump keeps ripping into Powell, raising continued speculation about whether he will eventually be canned.

Meanwhile, questions about the Fed’s independence are already looming large as the courts grapple with Trump’s firings at other independent agencies despite their statutory removal protections.

The terminations are part of an expansive view of presidential power advanced by Trump’s White House that would give him near-total control over the executive branch.

On Thursday, the Supreme Court handed Trump a major win in his effort by greenlighting his terminations of Democratic appointees at the National Labor Relations Board (NLRB) and Merit Systems Protection Board (MSPB).

It’s the latest sign that the conservative justices may be on their way to overrule Humphrey’s Executor v. United States, a 1935 Supreme Court decision that authorized Congress to provide for-cause removal restrictions for various federal agencies.

Already, the conservative justices have limited the precedent’s reach in a series of recent cases. But they have yet to formally overrule it.

Many court watchers believe the justices are skeptical of Humphrey’s Executor but are hesitant to eliminate the Fed’s protections, given the central bank’s role in setting monetary policy that at times can be politically unpopular.

Remarkably, the court dedicated one of the four paragraphs in Thursday’s order to distinguishing the Fed, suggesting its “historical tradition” could justify removal protections even if the president has control over other traditionally independent agencies.

In dissent, the court’s three liberal justices said the comment was “out of the blue” and asserted a simpler way to reassure the markets would have been to deny Trump’s request.

“I am glad to hear it, and do not doubt the majority’s intention to avoid imperiling the Fed,” wrote Justice Elena Kagan, joined by Justice Sonia Sotomayor and Justice Ketanji Brown Jackson.

“But then, today’s order poses a puzzle. For the Federal Reserve’s independence rests on the same constitutional and analytic foundations as that of the NLRB, MSPB, FTC, FCC, and so on — which is to say it rests largely on Humphrey’s,” Kagan continued.

The NLRB and MSPB cases will now return to the U.S. Court of Appeals for the D.C. Circuit. But soon, they could return to the Supreme Court, putting the Fed back in the limelight.

Welcome to The Gavel, The Hill’s weekly courts newsletter, we’re Ella Lee and Zach Schonfeld. Email us tips (elee@thehill.com, zschonfeld@thehill.com) or reach out to us on X (@ByEllaLee, @ZachASchonfeld) and Signal (elee.03, zachschonfeld.48). Not already on the list? Subscribe here.

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