The Unitary Executive and the Federal Reserve

The U.S. Supreme Court may soon embrace an interpretation of the U.S. Constitution that would significantly expand the power of the president over federal administrators and invalidate key provisions in dozens of federal statutes. A critical question is whether this interpretation—known as the unitary executive theory (UET)—would also render unconstitutional central bank independence (CBI), an arrangement where a country’s monetary policy is formulated by a semiautonomous body of experts insulated from partisan political pressure. Several justices have suggested that it would not, and a growing scholarly literature has proposed ways for the Court to distinguish the country’s central banking apparatus from the rest of the administrative state. This Article examines these proposals and concludes that none are tenable.

It then explains why UET is fundamentally inconsistent with CBI: the Federal Reserve’s independence from the president reflects a wholly different, and incompatible, approach to the separation of powers. It further suggests that since the regulation of money and banking is one of the most important functions of the modern state, the conflict with UET is arguably sufficient, standing alone, to reject the theory. Relatedly, it argues that if the Court wishes to preserve statutory limits on the president’s power to remove Federal Reserve officials without repudiating UET outright, it has only one viable option: stare decisis.