NextFin News - In a move that has sent ripples through the global financial community, Jacob Huebert, senior litigation counsel at the New Civil Liberties Alliance, has formally called for U.S. President Trump to exercise executive authority to remove Jerome Powell from his position as Chair of the Federal Reserve. According to the Herald-Dispatch, Huebert argues that the current statutory protections shielding Federal Reserve governors from being fired without "cause" are unconstitutional infringements on the powers vested in the U.S. President under Article II of the Constitution. This escalation occurs as the administration pursues a dual-track strategy of legal challenges and criminal investigations aimed at reshaping the leadership of the nation’s central bank.
The timing of Huebert’s call is critical. On January 21, 2026, the Supreme Court heard oral arguments in the case of Lisa Cook, a Federal Reserve governor whom U.S. President Trump attempted to fire in August 2025 over allegations of mortgage fraud. While Cook denies the charges, the administration’s legal team, supported by Huebert’s perspective, contends that the U.S. President should not be forced to share executive power with individuals he no longer trusts. Simultaneously, the administration has initiated a criminal investigation into Powell, issuing grand jury subpoenas on January 9, 2026, regarding his testimony to Congress about the renovation costs of Federal Reserve buildings. Powell has publicly characterized these investigations as pretexts for political retaliation against the Fed’s independent interest rate policies.
Huebert’s argument rests on a strict interpretation of the "Unitary Executive" theory. He posits that because the Federal Reserve exercises executive functions—such as making regulations and imposing fines—its leaders must be removable at the will of the U.S. President. According to Huebert, the current "for cause" requirement creates an unaccountable "fourth branch" of government. He suggests that if Congress wishes to maintain the Fed’s independence, it must strip the agency of its regulatory powers, leaving it only with the task of managing the money supply. This legal framework seeks to dismantle the 112-year-old precedent established by the Federal Reserve Act of 1913, which was designed specifically to insulate monetary policy from short-term political cycles.
The potential impact of removing Powell would be seismic. Historically, central bank independence is a cornerstone of market stability. When political leaders gain direct control over interest rates, the temptation to lower rates to stimulate the economy during election years often leads to long-term inflationary pressure. Data from previous instances of political interference in central banks globally suggests a strong correlation between reduced independence and higher consumer price indices. If U.S. President Trump succeeds in removing Powell and replacing him with a more compliant chair, analysts at firms like JPMorganChase warn of a "credibility premium" being added to U.S. Treasury yields, as investors demand higher returns to compensate for the risk of politically driven inflation.
Furthermore, the legal battle over Cook and the investigation into Powell represent a broader trend of the administration’s efforts to consolidate control over independent agencies. The Supreme Court is also currently weighing Trump v. Slaughter, a case that could grant the U.S. President the power to fire heads of the Federal Trade Commission and other independent bodies at will. A ruling in favor of the administration in either the Cook or Slaughter cases would provide the legal ammunition necessary for the U.S. President to move against Powell before his term as a governor officially expires in 2028.
Looking forward, the next few months will be a watershed moment for the American economy. If the Supreme Court validates the U.S. President’s removal authority, the Federal Reserve’s role as an independent arbiter of monetary policy will effectively end. This could lead to a period of heightened volatility in the bond markets and a potential reassessment of the U.S. Dollar’s status as the world’s primary reserve currency. Conversely, if the Court upholds the "for cause" protections, it will reinforce the institutional barriers that have defined the U.S. financial system for over a century, likely resulting in a relief rally for equities but continued friction between the White House and the Eccles Building.
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