Jan. 22 (UPI) -- The conflict between President Donald Trump and Federal Reserve Chairman Jerome Powell is raising urgent questions about the independence of the regulatory system.
The dispute rests on the president's power to remove officials from independent agencies and the hard line between removing for cause and removing for political reasons.
Peter Shane, constitutional law scholar in residence at NYU Law School, told UPI there are two legal questions at issue. One is whether the president can remove the chairman of the Federal Reserve. The second is whether the president can remove Powell from the Fed's Board of Governors completely.
"There is no statutory protection spelled out for the chairman's status as chairman so it would be the conventional understanding that it would always be within the president's discretion to designate a different chair," Shane said. "As far as being a member of the board of governors in the Federal Reserve system, Powell is protected by a statute that says he can only be dismissed for good cause."
Powell believes Trump's desire to remove him and sue him is punishment for the Federal Reserve not setting interest rates where he wants them.
