The Supreme Court fiercely debates Trump's "power to dismiss", the independence of the Federal Reserve may become a last line of defense in crisis.

A key justice of the United States Supreme Court expressed his desire to protect the independence of the Federal Reserve. At the same time, the conservative majority Supreme Court is considering whether to give President Donald Trump the power to dismiss members of the Federal Trade Commission and other similar independent agency officials. In the debate on Monday, Justice Brett Kavanaugh raised questions related to the Federal Reserve multiple times. He asked the government's top lawyer, Deputy Attorney General John Sullivan, to respond to arguments made by opponents, that if Trump's dismissal power is interpreted broadly in the FTC case, it will ultimately harm the independence of the Federal Reserve. "I have the same concerns," said Kavanaugh, who was appointed by Trump during his first term. The Supreme Court signaled on Monday that its 6-3 conservative majority is likely to support the government in this case, overturning a 90-year-old precedent and potentially allowing Trump to dismiss the heads of dozens of traditionally independent federal agencies. However, there are also indications that the government may face difficulties in dismissing members of the Federal Reserve without just cause. The justices are not scheduled to hear a separate case challenging Trump's attempt to dismiss Federal Reserve Board member Lisa Cook until January 21 next year, but the future relationship between the Federal Reserve and the White House was overshadowed in Monday's hearing. Sullivan acknowledged that the Supreme Court had previously signaled that it considers the Federal Reserve to be a "special case" when it comes to allowing the president to dismiss members without cause. He told Kavanaugh that the government is not directly challenging the protection clause established by Congress for the Federal Reserve that requires a just cause for dismissal. The Justice Department's argument is that the court cannot question how the president exercises this power to dismiss after the fact. However, several liberal-leaning justices on the Supreme Court pressed Sullivan, questioning how mechanisms excluding certain institutions (like the Federal Reserve) from the government's broad assertion in the FTC case that "Congress cannot limit the president's ability to control the exercise of executive functions officials" would work. Kavanaugh said he also has "serious doubts" about the government's position that judges do not have the authority to reinstate officials who were wrongly dismissed. He said this would be a form of "evasion" of the potential exceptions to the president's dismissal power (such as those related to the Federal Reserve and certain specialized courts handling U.S. government tax and money claims). Sullivan responded that the Supreme Court has previously agreed that the harm caused by forcing the government to readmit an official rejected by the president outweighs the individual interest of the official. "Special case" for the institution The Supreme Court has mostly sided with the White House in a series of dismissal cases this year, but in May indicated it views the Federal Reserve as a different entity within the U.S. government. In an unsigned court order, the justices described the Federal Reserve as "a structurally unique, quasi-private entity, following the unique historical traditions of the first and second banks of the United States". In October, the justices rejected Trump's request to immediately dismiss Cook (who has denied allegations of mortgage fraud against her), while the legal battle over her dismissal is ongoing. This contrasts with other orders issued earlier this year by the conservative majority on the Supreme Court that allowed Trump's dismissals of officials in other agencies to take effect during the case. Former Federal Reserve officials have warned that making it easier for the president to dismiss members could disrupt the U.S. economy, as the Fed's decisions on interest rates should not be influenced by short-term political considerations. In the FTC case, the Justice Department argued that the Supreme Court does not need to touch on the status of the Federal Reserve. The government stated in a written brief that it does not necessarily believe that the Federal Reserve's clause requiring a just cause for dismissal is constitutional, but if the justices are inclined to support that clause, "it would be an institution-specific 'special case'." Lawyers for the dismissed FTC member argued that if the Federal Reserve constitutes a "historical exception" to the president's power to dismiss agency heads, there may also be other "historically based" exceptions, including the Federal Trade Commission. The hearing took place on the eve of the Federal Reserve's final policy meeting of the year. It is expected that Federal Reserve officials will cut interest rates for the third consecutive time at this meeting. Trump has exerted significant pressure on the Federal Reserve this year, calling for large rate cuts and often insulting and scrutinizing Federal Reserve Chairman Jerome Powell. Trump has also openly expressed his desire to have a majority of members appointed by him on the Federal Reserve's Board - a prospect that would be closer to reality if Cook were dismissed. Powell has emphasized the importance of the Federal Reserve's independence multiple times this year, while insisting that the Fed does not take partisan considerations into account when formulating policy. The Federal Reserve has stated that it will respect any ruling by the courts regarding Cook. Cook has not missed any policy meetings this year and voted in favor of rate cuts at two Federal Reserve meetings held after Trump tried to dismiss her. Last month, she made her first public speech since the dismissal attempt, outlining economic outlook and financial stability issues.