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BySRSam Reyes·CMCal Morrow·EQEliza Quinn·DPDana Park
BREAKINGMay 9, 2026

An Independent Federal Reserve Could Be Constitutional

A May 2026 National Review article argues that Federal Reserve independence could be made constitutionally permissible if the Fed's coercive regulatory powers — such as consumer protection rulemaking and bank reserve regulation — were transferred to an executive-accountable agency, leaving the Fed with only voluntary monetary tools. This debate is unfolding amid President Trump's broader push for unified executive control over federal agencies, including his attempt to remove Federal Reserve Board of Governors member Lisa Cook. The Supreme Court is currently considering Trump v. Slaughter, a case directly challenging the constitutionality of statutory removal protections for leaders of independent agencies.

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⚡Both sides have significant internal splits on this story. Arguments below represent the dominant positions — see The Divide below for the full picture.

Should the Federal Reserve answer to Congress or operate independently from political pressure? A new legal argument suggests the Constitution might not require the Fed to be as insulated as it currently is — and that could reshape how America sets interest rates.

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Unitary executive trajectory is inevitable
Conservative
The alternative to the National Review framework is not the status quo — it is full presidential control, because that is where both the constitutional logic and the current Supreme Court majority are heading. Seila Law, Collins v. Yellen, and now Trump v. Slaughter form a line that is moving in one direction. If those who care about market stability refuse to engage with this framework, the fight will be lost on far worse terms than a surgical transfer of regulatory powers.
Liberal
You're describing a gun pointed at our head and calling the decision to hand over our wallet a principled choice. Accepting that any agency exercising real power must answer to the president doesn't stabilize the Fed — it teaches every future administration exactly which lever to pull. The 'surgical' transfer you're proposing concedes the entire premise of the unitary executive project before a single case is decided.
Conservative
That's a vivid metaphor, but it doesn't engage the actual constitutional trajectory. The Court has already pulled the trigger on single-director agencies twice — dismissing this as a hostage situation doesn't make the doctrine disappear.
Liberal
Doctrine develops incrementally, and nothing in Seila Law or Collins compels extending removal protection to the multi-member Fed board — which is precisely why this administration needs litigation rather than just a phone call to the Chair.
Nixon-Burns precedent versus real risk today
Conservative
The Nixon-Burns episode is the most powerful historical argument for Fed independence, and it belongs in this debate — but it actually supports the framework rather than defeating it. Nixon pressured Burns on interest rates, a monetary function. The solution is to insulate that monetary function constitutionally. Stripping Dodd-Frank enforcement powers from the Fed does nothing to the rate-setting machinery that Burns compromised.
Liberal
You're drawing a line between monetary and regulatory functions as though they're cleanly separable in practice, but the Nixon pressure worked precisely because Burns understood his institutional position was politically vulnerable across the board. Once you establish that the president can remove Fed governors who displease him — Cook being the test case — the chair doesn't need to receive a phone call. The chilling effect operates automatically.
Conservative
But Cook's removal is being litigated, not assumed — and if the Court upholds for-cause protection for multi-member boards while striking it for single-director agencies, you've preserved exactly the insulation Burns lacked.
Liberal
The market doesn't wait for the Court's final ruling — the signal that a Fed governor can be targeted for political reasons lands the moment the attempt is made, and that signal is already in the air.
Congressional design confers constitutional validity
Conservative
The argument that Congress deliberately designed the Fed's independence in 1913, reaffirmed it in 1951, and expanded it through Dodd-Frank deserves to be taken seriously — and then rejected on its own terms. Congress also deliberately designed the legislative veto, and the Court struck it down unanimously in INS v. Chadha. Deliberate congressional design does not immunize a structure from constitutional invalidation. The text of Article II is not amended by accumulated legislative preference.
Liberal
Chadha is a real precedent, but notice what you're actually arguing: that a unanimous 1983 decision about a specific procedural mechanism should govern the entire architecture of modern financial regulation. The legislative veto is one device. The Fed is a century of accumulated democratic judgment embedded in global financial infrastructure. The burden of proof for detonating that belongs to those proposing the change, not those defending continuity.
Conservative
The burden-of-proof framing is exactly backwards — the Constitution doesn't exempt structures from scrutiny because unwinding them would be expensive. Chadha didn't ask whether the legislative veto had become load-bearing.
Liberal
It asked whether a specific act of Congress violated a specific constitutional provision — and the Court spent decades narrowly construing what that holding required, which is precisely the model that argues for preserving multi-member board independence now.
Monetary and regulatory functions are separable
Conservative
The market credibility concern is real but it attaches to the monetary function, not the regulatory one. No trader in Tokyo is pricing U.S. Treasury bonds based on who enforces Regulation Z or Dodd-Frank's reserve requirements. They are pricing them based on whether they believe the Fed will fight inflation. That function — open market operations, interest rate decisions — can be insulated within a constitutionally coherent framework. The two functions are legally and practically separable.
Liberal
Walk through what 'separable' actually means operationally. The Fed's credibility as an inflation fighter rests partly on its ability to impose reserve requirements and stress-test major banks — these tools give rate decisions their bite. Strip the coercive regulatory powers and you've preserved the steering wheel while removing the brakes. A monetary-only Fed that can't enforce compliance isn't more credible; it's more exposed.
Conservative
Reserve requirements and stress tests could move to an executive-branch prudential regulator — the OCC, FDIC, or a new structure — without moving interest rate authority. Conflating the two proves the inseparability claim only if you assume they must be housed together, which is exactly the question.
Liberal
And who coordinates when the prudential regulator and the monetary Fed disagree during a crisis? The 2008 response required real-time integration of those functions — your framework assumes a clean handoff that financial panics don't permit.
Lisa Cook removal signals, not tests, independence
Conservative
The Cook removal attempt is being framed as an unprecedented political targeting, but it is more precisely a constitutional test case arriving at a moment when the doctrine is genuinely unsettled. The question of whether multi-member board governors can be removed only for cause has never been adjudicated. That is not evidence of bad faith — it is evidence that the constitutional question has been deferred for decades and is now unavoidable.
Liberal
The constitutional question may be genuine, but you can't separate it from the specific choice of who is being tested against it. Cook is one of two Black women ever to serve on the Board of Governors, confirmed by the Senate, serving a term with explicit statutory protection. The fact that this administration chose her, specifically, as its test case is not incidental to how bond markets read the signal — it is the signal.
Conservative
If the constitutional question is legitimate — and you've acknowledged Humphrey's Executor is 'architecturally shaky' — then it will be tested against whoever holds the relevant office. Arguing the test is illegitimate because of who holds it makes the constitutional question unanswerable.
Liberal
It makes the timing and target answerable, which matters because markets price intentions, not just legal theories — and the intention being signaled here goes well beyond resolving a doctrinal ambiguity.
Conservative's hardest question
The First Bank of the United States analogy is genuinely strained: it operated in 1791 with no administrative rulemaking powers, no regulatory enforcement apparatus, and in a constitutional environment before the modern administrative state existed at all. A critic is right to say that validating the modern Fed's independence by reference to an 18th-century chartered bank with none of the same functions is an originalist argument that proves far less than its proponents claim.
Liberal's hardest question
The strongest challenge to this argument is the empirical claim that other advanced democracies — notably Japan under Abenomics and the European Central Bank under political pressure from member states — have operated under closer executive influence without catastrophic loss of market credibility, suggesting that independence may be less uniquely necessary than the liberal case requires. This is genuinely difficult to dismiss because it means the argument depends partly on specific institutional and historical contingencies of the United States rather than a universal law of central banking.
The Divide
*Trump's assault on Fed independence has split both parties — conservatives between unilateral presidential power and constitutional alternatives, progressives between defending institutional autonomy and demanding democratic accountability.*
MAGA / UNITARY EXECUTIVE
The president has full constitutional authority to remove Fed governors as part of executive power.
CONSTITUTIONALIST-CONSERVATIVE
Fed independence can survive by stripping coercive regulatory powers rather than submitting monetary policy to presidential control.
“An independent bank with no coercive rulemaking authority would be constitutionally permissible under Founding-era standards.” — National Review
INSTITUTIONAL / MAINSTREAM DEMOCRAT
Fed independence is essential; defend it legally and treat the Supreme Court case as the decisive battleground.
PROGRESSIVE / POPULIST LEFT
Fed independence itself insulates elite monetary policy from democratic scrutiny; oppose Trump's power grab but question institutional autonomy favoring Wall Street.
The Verdict
Both sides agree
Both sides accept that the Supreme Court's trajectory in Seila Law (2020) and Collins v. Yellen (2021) has genuinely narrowed the constitutional protections for independent agencies, and that Trump v. Slaughter represents a live threat to existing Fed governance structures—the disagreement is about whether this trajectory is constitutionally correct, not about whether it is happening.
The real conflict
The conservative case rests on a facts-about-constitutional-structure claim: Article II vests executive power in the president, regulatory enforcement is executive power, and therefore any agency exercising regulatory authority must answer to presidential removal—this is presented as textual logic, not prudential judgment. The liberal case treats this as a values conflict: constitutional purity should yield to the democratic judgment embedded in a century of legislation explicitly designed to insulate monetary policy from presidential control.
What nobody has answered
If the Fed's regulatory authority were transferred to a presidentially accountable agency and the Fed retained only monetary tools, would that transferred agency actually enforce financial discipline—or would a president facing electoral pressure simply order it to relax capital requirements and enforcement before an election, meaning the separation solves nothing and merely obscures where the political vulnerability actually is?
Sources

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