“Legally, the answer is complicated and untested. No Fed chair has ever been removed by a President.
The Federal Reserve Act allows for the dismissal of Board members, including the chair, “for cause.” But that has historically been interpreted as misconduct or incapacity, not policy disagreements. “The court would typically not see disagreements over interest rates settings as ‘for-cause,’” Binder says.”
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“Still, the Trump Administration appears to be laying the groundwork for a potential confrontation. Treasury Secretary Scott Bessent recently told Bloomberg that he expects to begin interviewing possible replacements for Powell in the fall.”
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“At the heart of that debate is a nearly century-old legal precedent: Humphrey’s Executor v. United States, a 1935 Supreme Court ruling that limited the President’s ability to remove leaders of independent agencies without cause. The ruling has long shielded Fed chairs from political dismissal, but could soon be tested by a conservative Supreme Court.”
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“Trump has blamed Powell for failing to act aggressively enough to support economic growth, saying the Fed chair is “playing politics” by keeping interest rates steady. But central bankers—and many economists—argue the opposite: that an independent Fed is essential to managing inflation and stewarding the economy, and that caving to political demands could damage the economy and global trust in U.S. institutions.”
https://www.yahoo.com/news/trump-fire-jerome-powell-213123735.html