By Nick Timiraos
For decades, the Federal Reserve's independence from the White House rested on an unwritten set of norms: Presidents would name appointees including the chair to the central bank's board and grumble about interest rates -- but ultimately leave the place alone.
A federal judge's ruling Friday throwing out a pair of criminal subpoenas targeting Fed Chair Jerome Powell underscored how President Trump has upended that arrangement, pressing to exert direct control over interest-rate decisions in any way possible. The result has been an arrangement where Fed independence is protected no longer by norms, but by court orders.
U.S. District Judge James Boasberg dismantled the investigation sought by U.S. Attorney Jeanine Pirro, a longtime Trump ally, in a 27-page ruling unsealed Friday. He concluded that the subpoenas, which center on a few minutes of congressional testimony on the Fed's building renovations last summer, were designed to "harass and pressure" Powell into lowering rates or resigning. Pirro said she intends to appeal.
Boasberg, an Obama appointee, said the government hadn't provided evidence of any criminal wrongdoing, a point several Republican senators on the committee that heard the testimony have also made.
The subpoena fight isn't the only front where the Fed's independence is being defined by judges rather than political restraint. The Supreme Court is weighing whether Trump can remove Fed governor Lisa Cook over mortgage-fraud allegations that Cook disputes.
That case could determine for the first time how easily a president can dismiss members of the central bank's board. A ruling upholding Cook's removal protections would reinforce the legal walls around the Fed. A ruling against her could give any president a direct lever over monetary policy that none has previously had.
The Supreme Court i s expected to rule against Trump in the Cook case. "He's tried two flagrant ways to go after two governors. He's been rejected by one court and he'll be rejected by the higher court," said Mark Spindel, an investment manager and co-author of a book on the history of Fed independence.
The Fed's independence exists because Congress and presidents have recognized the trade-offs of pushing for lower rates to juice short-term growth at the cost of higher inflation later.
U.S. law gives the Fed the power to control its own budget, gives officials long, staggered terms and insulates them from removal over policy disputes. Countries where political leaders have controlled monetary policy, such as Turkey or Argentina, have suffered chronic inflation that erodes living standards and destabilizes economies.
Legal victories alone might not be enough to secure the Fed's autonomy. The central bank ultimately depends on sustained and broad political support to protect its independence. The most significant consequence of Trump's approach might have been that it awakened a Senate that had otherwise shown little appetite to push back on executive power.
In particular, retiring Sen. Thom Tillis (R., N.C.) has vowed to block Fed nominees, stalling the process for replacing Powell, whose term as chair expires in two months. Trump has nominated former Fed governor Kevin Warsh to serve as chair.
The transition -- and Trump's public statements that he expects his next Fed chair to bring rates down -- make the court battles over the subpoenas and Cook's removal all the more consequential for determining the limits of presidential power over the central bank.
For Warsh, the saga carries its own paradox. A strong judicial and congressional defense of Fed independence could offer a valuable shield once he takes the job, assuring investors that the central bank will be able to take unpopular steps, if needed, to keep a grip on inflation.
But he faces a delicate path to get there. Tillis implied on Friday that Pirro's decision to appeal could delay his confirmation. Warsh could initially face a challenge demonstrating enough independence to ease doubts among lawmakers and investors that he will set policy on the merits without provoking a president who just this week demanded the Fed cut rates immediately -- something officials are unlikely to do at their meeting next week.
The danger for the Fed is that the very steps it took to defend itself could make it harder to stay above the fray. The unsealed filings revealed the central bank making its most forceful case ever against a sitting president. In its reply brief, the central bank's outside lawyers cataloged 100 public statements by Trump and his allies attacking Powell between 2018 and this year.
The Fed argued that this record led to only one conclusion, that the subpoenas were designed to help Trump "seize for himself a power specifically denied to him by federal law." Pirro, in a press conference Friday, said the judge's decision wrongly allowed Powell to be "bathed in immunity" from investigation.
Judges and lawmakers have drawn a line around the Fed for now. Whether that line holds once Powell leaves and the next chair takes the job will test whether independence defended by court orders can prove as durable as independence once defended by custom.
Write to Nick Timiraos at Nick.Timiraos@wsj.com
(END) Dow Jones Newswires
March 14, 2026 07:00 ET (11:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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