Former Regulatory Officials Warn: Fed Independence Protections May Not Last
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Former FTC commissioner Rebecca Slaughter warns that the Supreme Court carved out a "Wall Street exception" to protect Fed governors from dismissal — a logical inconsistency that signals the Fed's legal shield is far more fragile than markets assume.
What did the Supreme Court actually rule?
In March 2025, Trump fired Slaughter without cause. The Supreme Court ruled 6–3 in favor of the White House, overturning *Humphrey's Executor v. United States* — a 1935 landmark that shielded officials at independent agencies from presidential removal.
Yet in the case of Fed governor Lisa Cook, the Court ruled 5–4 in her favor, blocking Trump from dismissing her.
This means → the same Court, facing the same president, tore down the wall for independent agencies while leaving a single door open for the Fed. The contradiction is the point — that door can close at any time.
Why does Slaughter call this shield "not durable"?
Her core argument: the Fed's protection is a "Wall Street exception" — the broader principle shielding independent agencies was gutted, but the Court made a carve-out for the one institution financial markets care about most.
In plain terms = an exception that cannot be justified on legal principle rests on the justices' political calculus of the moment. A different bench or a different moment could yield a different result.
This reflects a decades-long conservative legal campaign to overturn *Humphrey's Executor*. Trump merely provided the vehicle. Protecting the Fed was never on that campaign's agenda.
Is pressure on the Fed already happening?
Trump had publicly pressured Fed Chair Jerome Powell to cut rates faster.
The Justice Department then opened a criminal probe into Powell. A judge found "substantial evidence" that the probe itself constituted pressure, and the investigation was shut down.
This means → even with the Supreme Court temporarily shielding Fed governors, the executive branch can exert pressure through informal channels like criminal probes — there is a wide gap between legal protection and actual independence.
Has the chain reaction already begun?
The ruling's ripple effects are visible: the Trump administration last week ousted the remaining members of the Election Assistance Commission — a bipartisan independent body that helps manage elections.
Law professor Jessica Levinson notes the ruling gives Trump and future presidents broader power to reshape the FTC and other "alphabet agencies" (federal regulatory bodies known by their acronyms), while weakening Congress's ability to shield them.
In plain terms = the Fed's protection is an island. The independent agencies surrounding it are losing their barriers one by one — how long the island holds depends on the force of the next political shock.
Content is for reference only, not financial advice.