The Untouchable Agency

The Problem of Cook, Central Banks, and the Constitution

Central banks are the unquestionable, untouchable, and often invisible engines of economies. Nearly every country relies on them, and even mild changes in their policies swing markets, elections, and the balance of national and global power. None of this power can turn a central bank into the two things it is not: constitutional and necessary.

At the close of its term, the Supreme Court issued two major decisions on executive power. In Trump v. Slaughter, the Court held that the Constitution vests executive power in the President alone and overruled the 1935 precedent Humphrey’s Executor, restoring the President’s ability to remove the heads of administrative agencies. Immediately qualifying its ruling with its decision in Trump v. Cook, the Court left in place a preliminary injunction blocking President Trump’s attempt to remove Federal Reserve Governor Lisa Cook. The President, the Court appeared to say, is in charge of all executive agencies, save one. Tampering with the Fed is beyond the pale.

This exception cannot be squared with the Constitution’s text or the history and tradition of U.S. central banking.