Lev Menand and Nathan Tankus on Why Fed Independence Is Now Hanging by a Thread

July 17, 2026

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5 min read

In a 5–4 decision handed down in early 2025, the Supreme Court ruled that President Trump could not fire Federal Reserve Board Governor Lisa Cook without cause. The reasoning was a surprise: the court invoked the Second Amendment’s “history and tradition” test from United States v. Rahimi, then looked for a founding-era analog for central bank independence. They found one in Alexander Hamilton’s advocacy for the First Bank of the United States. The Fed, the court said, is different.

Columbia Law professor Lev Menand and Nathan Tankus of Notes on the Crisis join Odd Lots to explain why that carve-out is far weaker and weirder than it sounds—and why the Fed’s legal independence is now hanging by a thread.

The Legal Backdrop: From Myers to Humphrey’s Executor to Slaughter

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What you'll learn

1 (01:35) **Episode Introduction & The "Hamilton Exception"** - Tracy and Joe introduce the topic: two recent Supreme Court decisions on presidential removal power, and the Fed's unique carve-out citing Alexander Hamilton.
2 (05:47) **Defining the Key Precedent: Humphrey's Executor (1935)** - Lev explains the 1935 case that first limited the president's power to fire FTC commissioners, creating the legal foundation for "independent agencies."
3 (08:57) **The Political Logic of Independent Commissions** - The guests argue these bodies were designed as lower-case "c" conservative institutions to stabilize law and investment, not as a liberal invention.
4 (11:15) **Why Economists Care About the Fed But Not Other Agencies** - The guests diagnose a disconnect: academic economists champion "independent central banking" as a universal ideal, but have historically ignored the actual legal structures that create independence.
5 (17:08) **The Origin Story: The Interstate Commerce Commission Model** - Lev traces the Fed's structure back to the 1887 Interstate Commerce Commission, which was designed as a specialized court for complex economic issues (railroads).
6 (20:21) **The CDC Counterfactual** - Nathan argues the logic of "credible commitment" would have been more valuable for the CDC during COVID than for the Fed, highlighting the arbitrary nature of which agencies got legal protections.
7 (22:20) **The Court's Bizarre Reasoning: Importing Second Amendment Doctrine** - The guests explain how the court used a gun rights case (*Rahimi*) to create a "history and tradition" test for the Fed's removal protections.

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Show Notes

Last August, President Trump made the unprecedented choice of moving to fire Fed governor Lisa Cook. The administration claimed she was being terminated with cause, citing an ongoing investigation in alleged mortgage fraud committed by Cook. The legal battle between Cook and the administration has been tangled in the courts for the last year, eventually reaching the Supreme Court. This June, in a 5-4 decision, the court ruled in favor of Cook. However at the same time, in a different case, the court allowed the President to fire individual members of the FTC, undermining its role as quasi-independent body not beholden to the executive branch. So what are the implications here? How can the court change the status of a body like the FTC while allowing the Fed to continue operating as is? And for how long will the Fed maintain some amount of operational autonomy? On this episode we speak with Columbia Law School's Lev Menand who just wrote a piece on these two cases for Just Security called The Federal Reserve Exception to the Slaughter Rule as well as Nathan Tankus (writer and president of Notes on the Crises). The two of them lay out the consequences of these two decisions and they dig into the generations-long legal history, starting with Alexander Hamilton, that explains how we got here.

Read more: Can Trump Still Fire Lisa Cook After Her Supreme Court Win?

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