Analysis: If Trump successfully overturns the "Humphrey Case," the space for him to fire the Fed Chair will increase

Blockbeats
04-15

BlockBeats News, April 15. Recently, Trump urgently filed an application with the US Supreme Court, hoping the justices would grant him unrestricted dismissal power. However, what stands in his way is a precedent from the Franklin D. Roosevelt era known as the "Humphrey's Executor v United States" case.

In 1933, due to disagreements over trade policy and opposition to his "New Deal" plans, Roosevelt attempted to dismiss one of the five commissioners of the Federal Trade Commission, William Humphrey. Humphrey sued Roosevelt, and although he passed away the next year, in 1935, the Supreme Court ruled in his favor. For decades, the "Humphrey's case" established a principle: the President does not have unlimited dismissal power.

This precedent protects the independence of executive agencies established by Congress with "quasi-judicial" or "quasi-legislative" powers, such as the Equal Employment Opportunity Commission, the Securities and Exchange Commission, and others.

In the spirit of the "Humphrey's case," a district court ruled that Trump did not have the power to dismiss two officials appointed by Biden in 2021 and 2022: Cathy Harris (Merit Systems Protection Board (MSPB) member) and Gwynne Wilcox (National Labor Relations Board (NLRB) member). As Trump did not provide any reasons for these dismissals and solely because he believed these two individuals would not support his policies, the court deemed his actions invalid.

In the emergency application submitted to the Supreme Court, the Trump camp argued that these court rulings were "untenable." The application stated that the President "should not be forced to hand over executive power to agency heads at odds with government policy, if only for a day, let alone the months it would take for the court to hear this case."

University of Virginia law professor Sai Prakash believes that the "Trump v. Wilcox case" could potentially completely overturn the legal status of the "Humphrey's case." Will Baude from the University of Chicago Law School also stated that the justices are "almost certain" to end the "Humphrey's case."

The Federal Reserve and its Chair have never been completely free from political influence, such as Nixon's request to Chairman Burns to lower interest rates before the 1972 election. Trump also regretted nominating Powell as Fed Chair during his tenure. Recently, Trump also stated that he would not replace Powell before his term ends in May 2026 (his term on the board extends until 2028). However, if Trump becomes dissatisfied with Powell again and the "Humphrey's case" is overturned, he would have more leeway to dismiss the Fed Chair. (Jinshi)

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