Supreme Court makes landmark ruling allowing Trump to fire independent agency board members

Washington DC - The US Supreme Court on Thursday allowed President to fire leaders of two independent agencies, but signaled that would not be permitted for .

The US Supreme Court on Thursday allowed President Donald Trump to fire leaders of two independent agencies, but signaled that such dismissals would not be permitted for the Federal Reserve. © JIM WATSON / AFP

The 6-3 decision puts on hold that the two leaders be reinstated and marks a major win for Trump in his bid to greatly expand presidential power over .

The case has been closely watched for what it could entail for the Fed, another independent agency whose rate-setting committee holds immense power in the world's biggest economy and whose chairman Trump .

A decision permitting Trump to fire Federal Reserve board members could send shock waves rippling through the global economy, with the US central bank's independence thrown into question.

But the court's six-member conservative majority appeared to carve out a special exemption for the central bank.

The two agency heads who had sued Trump, alleging that their firings were illegal, had claimed that any decision to the contrary would also implicate the Federal Reserve.

"We disagree," said the majority.

"The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States," the justices added.

The court nonetheless permitted Trump's firing of Gwynne Wilcox and Cathy Harris, both Democratic members of independent quasi-judicial labor boards, despite federal laws saying that they can only be dismissed for "cause."

The conservative majority said that the Constitution allows Trump to "remove without cause" officials exercising executive authority on his behalf, "subject to narrow exceptions recognized by our precedents."

The Supreme Court's three liberal justices dissented from the ruling, saying the two agency board members should be protected at this stage under a landmark 1935 decision.