(Reuters)-The decision of the Supreme Court of the United States on Thursday, in a legal battle on the resignation of two members of the Federal Labor Council by President Donald Trump, contains a line that has been relieving, concerns that cases could open the door to Trump to dismiss the Federal Reserve Chair, Jerome Powell.
The Court’s decision allows Trump to keep both Democratic members of the Labor Council removed as they dispute the legality of their removal.
Gwynne Wilcox’s lawyers, who was removed from the National Labor Relations Board, and Cathy Harris, who was fired from the Merit Systems Protection Board, argued that a decision in favor of the Trump government could undermine legal protections to Fed authorities, long seen as protected from presidential dismissal for reasons that are not misconduct.
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“We disagree,” said the majority of the judges in the brief and unlawful decision of the court. “The Federal Reserve is an almost private, uniquely structured entity that follows the distinct historical tradition of the first and second banks.”
Both cases have been accompanied as indicators to find out if Trump has the authority to dismiss Fed employees. The 1913 Federal Reserve Law, which created the third and existing Central Bank of the country, stipulates that Fed employees can be dismissed only “for just cause”, not for political or policy disagreements.
“This point of view of the Supreme Court really relieves my concerns about their extrapolate NLRB’s slope for the Fed, so I breathed relieved,” said Derek Tang, an LH Meyer analyst, who accompanied the cases closely.
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Trump has repeatedly attacked Powell, which he nominated for his first term and was renamed for a second term by Democratic President Joe Biden, and said he wants to see him out of the Central Bank.
Although Trump, who attacked Powell because of the Fed’s decision not to reduce the interest rate, has recently said that he has no intention of trying to fire Powell, the possibility disturbed the financial markets that bet on the ability of a Fed independent of doing his work without political interference.
A Fed spokeswoman did not comment.
