The Democrats are tut-tutting President Trump’s boast about the Fed chairman, Jerome Powell, that “if I want him out, he’ll be out of there real fast, believe me” and that his “termination cannot come fast enough.” Senator Schumer says that “an independent Fed is vital,” and Mr. Powell avers that the central bank’s independence is a “matter of law.” He vows not to bow to an order to fire him, for the Federal Reserve Act says he can be fired only “for cause.”

The question, then, is what would constitute cause to remove Mr. Powell from the board of the central bank? Our own view is that cause means nothing if it doesn’t include running an inflationary monetary policy, debasing the dollar, or operating the Fed with inadequate capital — or, as Chairman Powell is currently doing, a negative net worth. This has been well argued by our Federal Reserve watcher, Alex Pollock.

What troubles us about the current pass is that President Trump is not addressing the complaints that trouble the conservatives. He wants lower interest rates and easier money, even at the risk of inflation, in order to preserve his overall program. We might not agree with it, but we’re not the president, and Mr. Trump can be encouraged, we’d think, by the words of Chief Justice Roberts in the case of the Consumer Financial Protection Bureau.

That case, Seila Law v. Consumer Financial Protection Bureau, in 2020 affirmed Mr. Trump’s ability to fire the head of another purportedly independent federal agency, the Consumer Financial Protection Bureau. “In our constitutional system,” Chief Justice Roberts wrote for the majority, “the executive power belongs to the president, and that power generally includes the ability to supervise and remove the agents who wield executive power in his stead.”

In Seila Law, the high court conceded that a precedent from 1935, Humphrey’s Executor v. United States, could impinge on the president’s power to remove directors of “expert agencies” that are “led by a group of principal officers.” Yet Mr. Powell is by law the “active executive officer” of the Fed, so he is a federal agency chief. Under the Seila Law precedent, such heads of agencies “must be removable by the President at will,” as Chief Justice Roberts wrote.

Mr. Powell has previously vowed that he “will never, ever, ever leave this job voluntarily until my term ends under any circumstances.” The Fed’s policy-making Open Market Committee has even schemed to defy President Trump if he ever tried to fire the chairman. The FOMC would simply opt to re-elect Mr. Powell if his “status” were “called into question” by the president. “The Revolt at the Fed,” is how we described that truculence. 

That a federal agency would contemplate such a move underscores the anomalous place that the Fed occupies in the constitutional framework. Blame for that lies at the feet of Congress, to which the Framers assigned the monetary powers of the federal government. The Framers opted to give the legislature these powers knowing that it was the most political — and therefore the most accountable to voters — of the three branches.

So it was constitutionally dubious when, in 1913, at the height of the Progressive Era, Congress created the Fed in an attempt to scientifically manage America’s currency. At the time the dollar was convertible into gold at the rate of a 20.67th of an ounce. Since then, though, the central bank has failed to serve as a reliable steward of the dollar’s value. Under Mr. Powell the dollar has plunged to a record low — less than a 3,300th of an ounce of gold.

Amid the squabble over Mr. Powell’s future, the point to mark is that a truly independent monetary policy is one in which the value of the dollar is, by law, defined in specie — gold or silver. That restoration would ultimately require the Congress to reclaim its authority over monetary policy. For now, though, with the Fed operating as a federal agency, Mr. Trump has the power to fire Mr. Powell at his discretion — and, if push comes to shove, for cause.