Chief Justice Roberts Tries to Save the Fed from Democracy and the Constitution

The history and usefulness of an independent central bank is no substitute for a constitutional power to separate it from the political branches.

M y initial column offered an overview of today’s two big executive removal power cases, Trump v. Slaughter and Trump v. Cook. Let’s continue with a closer look at Cook.

Chief Justice John Roberts is famously a stickler for process in political decision-making, frequently upholding executive and legislative actions that have been thoroughly considered (however unwisely), and often voting to send the political branches back to the drawing board if he is not convinced that they have done their homework. That often mixes poorly with Trump’s style of governing, and it did so here. But the much more controversial part of Cook is the chief justice’s decision to place the Federal Reserve outside of the system of popular accountability that the Constitution prescribes for everyone in the federal government outside of the judiciary. Thus, Congress can protect the Fed, and perhaps only the Fed, from having its leadership sacked by the president in order to allow the president to implement his vision of how executive powers should be carried out.

Trump’s Homework

Because Slaughter ruled that the president acted within powers not constrained by any standard that courts could review, it was able to focus on broad, constitutional questions of separation of powers. But before reaching the big-picture constitutional question, readers of Cook are not similarly spared from the weeds of exactly how courts are supposed to confront challenges to removals for cause.

Lisa Cook was appointed to the Fed board in 2022 by Joe Biden and confirmed a year later to a full 14-year term. (Perhaps in a sane world, “appointed by Joe Biden” would be cause for firing, but that undoubtedly is not what the statute has in mind). From Roberts’s summary of how Cook’s firing unfolded, one can already tell that Trump is getting sent to the principal’s office:

On August 20, [2025], the Federal Housing Finance Agency’s Director, William Pulte, posted to social media a letter dated a week before. The letter was addressed to Attorney General Pamela Bondi, and it accused Cook of mortgage fraud. “According to mortgage documents obtained by” the Agency, it stated, “it appears” that Cook “falsified bank documents and property records to acquire more favorable loan terms” in 2021, by claiming two homes simultaneously as her principal residence. . . . Less than 30 minutes later, President Trump posted to social media that “Cook must resign, now!!!” and linked to a news article about Pulte’s letter. . . . Two days later, the President told reporters that “what Cook did was bad” and that he would “fire her if she doesn’t resign.” . . . Three days after that, President Trump purported to fire Cook for cause. In a letter to Cook, he stated that he had “reason to believe” that she “may have made false statements on one or more mortgage agreements.” [Quotations and citations omitted.]

Cook’s alleged misconduct predated her time in office; while it reflected on her integrity, it had nothing do with her job performance. Cook had never been convicted or even charged with a crime, nor sued civilly or charged administratively. She was not given any forum in which to dispute the charges. If Trump was not claiming to fire her for cause, this would be irrelevant, but the dismissal raised multiple unsettled legal questions about what causes would justify a for-cause removal, what process the executive must follow, and what sort of judicial review is available.

A district court soon entered a preliminary injunction preventing Cook’s removal, and this case came to the Court (originally on the emergency docket) to decide whether that injunction was properly entered. The lower court had held one preliminary hearing. Justice Samuel Alito and Justice Amy Coney Barrett both noted that this was reason in itself for the Court to decide the case on the narrowest possible grounds, while Justice Brett Kavanaugh wrote separately in a concurring opinion to observe that the Court didn’t foreclose a later decision by the courts that Trump could justify the firing on the basis of evidence not yet presented.

Judicial Review

First up, the majority concluded that Congress didn’t exempt “for cause” removals from judicial scrutiny. Certainly, it said nothing about judicial review, quite unlike the review bar at issue in the Temporary Protected Status case: “Congress could of course afford the President the power to remove Federal Reserve Governors at will. Or Congress could exempt the President’s removal of Governors for cause from judicial review. But Congress has done neither.” To the solicitor general’s fallback argument that any cause will do so long as the president cites one, Roberts rejoined, “the only way for us to tell whether the President has identified cause under the statute is to interpret the statute, and decipher what precisely it means by ‘cause’ (emphasis in original).” It would require something more explicit to oust the judiciary from that ordinary judicial function.

Similarly, the Court reached for the familiar presumptions in treating the lack of statutory detail about what is and isn’t “cause” as importing the background presumptions of the common law. At the same time, it declined to just import the list of causes detailed by Congress in other statutes but not this one, such as inefficiency, neglect of duty, malfeasance in office, or ineligibility for office. It seems likely — but not quite stated by the Court — that any of those causes would do; they are just not necessarily an exhaustive list that categorically excludes personal financial dishonesty.

What little guidance Roberts ended up leaving for lower courts, and for presidents and members of the Fed, was unsatisfying and not actually drawn from the common law or from other statutes. “Any definition of ‘cause’ in this context must reflect the Federal Reserve’s unique historical status and role,” by which Roberts means that causes should not be recognized lightly:

Not only the fact of independence but also the appearance of independence is key to the Federal Reserve’s design. That counsels a substantial threshold for “cause.” It is true, of course, that “cause” cannot be reduced to a precise set of rules, and some close calls are inevitable. Whether “cause” for removal exists in any given situation will de­pend, at least in part, on the seriousness of the alleged misconduct, and the extent of any nexus that may exist to the Governor’s professional duties. The key issue is whether the cause assigned truly implies an unfitness for the place—or whether it simply represents an effort to secure a more congenial replacement. . . . We are not required to exhibit a naiveté from which ordinary citizens are free. . . . Without such constraints in place, any perceived or alleged misstep (past or present) could provide a ready pretext for a Governor’s removal—a fact that he would surely know, and that would surely weigh on him as he decided what to say and how to vote. Nothing could be more corrosive of the independence that Congress sought to preserve. [Emphasis in original; quotations and citations omitted.]

In other words, Roberts doesn’t exactly foreclose lower court judges who hate Trump from just declaring his actions a “pretext,” but if read in good faith, what the Court is doing here suggests not a review for pretexts but adopting only standards sufficiently clear and substantial that a president who meets them can argue that he had causes substantial enough that the courts need not worry about pretexts. That may be a wise rule of thumb, but it is hard to see where Roberts thinks the courts get the authority to draw such lines if not from either statutes or common law. It reeks of reasoning from statutory purpose rather than statutory text, which was one of the chief sins of the chief’s Obamacare opinions. If a standard “cannot be reduced to a precise set of rules,” it is probably not the judiciary’s job to apply it.

If the courts can review dismissals for the purpose of protecting Fed independence — rather than for the benefit of the officeholder — then a court needs to be able to prevent the removal rather than just allow a lawsuit after the fact for lost wages from an improper dismissal. That conclusion led to a disagreement between Roberts and Justice Clarence Thomas, who argued that equity traditionally did not empower disappointed officials to sue for reinstatement, or courts to order it.

Executive Process

Before even getting to the question of what causes are and aren’t adequate and supported by evidence, there’s the question of when and how the executive was required to prove them before firing an official. The lower courts ruled that Cook had a constitutional due process right to some sort of hearing before being fired, at which she could dispute the charges. Roberts didn’t take that route but concluded that the statute requires “notice and some opportunity to respond prior to her termination. . . . That is not to say that a Federal Reserve Governor is entitled to an audience with the President or a full-blown judicial trial. . . . All that is required is notice to the officer of the charges made against him and an opportunity to be heard in his defense (quotations and citations omitted).”

The statute says nothing of the sort. Roberts’s argument on this score isn’t wholly invented; he contends that the 1913 writing of the Federal Reserve Act was against the backdrop of decisions in 1901 and 1903 that said that officers appointed to a fixed term were entitled to notice and a hearing before being fired.

Roberts was unamused by the suggestion that Trump gave Cook any sort of hearing:

In [the government’s] view, the President gave Cook notice and an opportunity to be heard when he first posted about the matter on social media. That is despite the fact that the President’s post did not suggest that a response from Cook would be appropriate, nor did it even provide a clear account of the charge made against her. It instead read simply “Cook must resign, now!!!” and linked to a news article about Pulte’s letter. . . . That will not do. At minimum, Cook was entitled to some explanation of the evidence at issue, some avenue for a response, and a deadline by which a response would be due.

“That is not to say that a response from Cook necessarily would have changed the President’s mind,” Roberts added; there’s no right to a fair or sympathetic hearing, given that this is an executive decision. But in the Court’s view, there’s a right to make a case. The majority denied that it was foreclosing Trump from trying again, so long as he actually presents Cook with the evidence and a chance to respond.

Fed Up

It’s at this point, using as an excuse that it’s a response to Thomas, that Roberts insists upon having the Court commit to “upholding the constitutionality of the Federal Reserve as currently structured and with its existing enforcement authorities,” without anything resembling full briefing on each of those authorities and their implications. But this is a ticket for this ride only: “We do not suggest that Congress could assign the Federal Reserve additional regulatory powers that are attenuated from monetary policy.”

Roberts’s history lesson dates back to the Bank of North America, organized during the Revolutionary War under the Articles of Confederation, and in that sense, he fortifies the case that the First Bank of the United States, chartered in 1791 by people who’d been in the room at Philadelphia in 1787, was not exercising authorities unforeseen then. But it’s one thing to argue that central banks are constitutional, and that their independence is good policy; neither shows that the Constitution included an unwritten clause that put bankers in a different category from all other executive officers. If, as Alexander Hamilton argued, trustworthy central banks needed to be “under a private not a public Direction,” one would think the legal answer is to create a bank that is not part of the government at all.

There really isn’t much more to the constitutional argument here than the history. History is useful and important, but the Court just blows by the usual questions not only of text but of structure in the separation of powers. As Barrett asked, “How can history support both a categorical rule and a carveout?” Is the Fed an executive agency or not? Are each of its powers executive in nature — the majority doesn’t even list them. Barrett again: “Do all the Federal Reserve’s existing regulatory powers have the requisite connection to monetary policy? If not, are they grandfathered in?”

One can hear a certain echo of disdain for the current president when Roberts, in his history of our central banks, observed that “Andrew Jackson savaged the Second Bank as a ‘hydra of corruption’ only he could slay.” Only he. After this, Roberts tells us, followed “an era of ruinous financial panics—the ones of 1837, 1857, 1873, 1893, and 1907” that “were in no small part attributable to Jackson’s crusade.” Jackson’s portrait, of course, currently hangs in the Oval Office. Thomas could not avoid a dig at a history of financial crises that skipped over 1929, 2008, and our current era, in which the portrait of Jackson in your wallet buys a lot less than it did five years ago: “Many do not share the Court’s rosy appraisal of the past century.” By contrast, as in Slaughter, Roberts had glowing words for William Howard Taft, discussing the process Taft used before firing people and adding a gratuitous footnote quoting the line that “Taft was our most judicial president, as he was our most presidential chief justice (quotations and citations omitted).”

Feeling defensive, Roberts argued that it was time to settle the issue:

How much to say on our interim docket—and how much to say in formula; it is ultimately a matter of prudence, upon which reasonable minds can (and often do) disagree. . . . In this extraordinary case, we have had the benefit of not only amici and oral argument but months of internal consultation and deliberation. We see no reason to leave the public in limbo, or to sow doubt as to the status of one of our Nation’s (and the world’s) most important financial institutions.

Kavanaugh added:

We should not leave open the question whether the Federal Reserve can remain an independent agency in the wake of Slaughter. After Slaughter, there is a clear choice: Either the Federal Reserve may remain independent (with the Governors removable for cause, not at will), or it may not. Leaving that question open would create significant uncertainty about whether the Court might soon eliminate the Federal Reserve’s independence, and thereby expose the Federal Reserve to political influences and jeopardize the efficacy of U.S. monetary policy. Even temporary uncertainty about the status of the Federal Reserve could spark political upheaval, including confusion about whether the President could immediately remove multiple Governors at will, as well as turmoil in the U. S. and world economies.

I would not go down that road. I would not risk destabilizing the U. S. economy just so that we can further mull over an issue that, in various permutations, we have been thinking about for many years. . . . The Federal Reserve occupies a unique role in the U. S. Government and maintains critical responsibility for the stability and success of the U. S. and world economies.

They have a point, which is that there is an element of prudence that goes into what the Court does and doesn’t decide in its cases. And it is true as a policy matter that certainty in monetary policy is vital. But it really would have been wiser to wait for somebody to actually argue a case for the right to sack Fed governors at will before deciding that question. Sure, Thomas raised the issue, but Thomas raises issues that the rest of the Court ignores dozens of times every year. As Thomas rejoined, “If the Court prefers an independent Federal Reserve Board, then its issue is not with the President but with the Constitution.”