Supreme Court appears to carve out a murky exception for the Federal Reserve

This is the key point but the article somewhat misapprehends it:

> With the Federal Reserve, however, the Supreme Court’s conservative justices have applied a different view: that the Fed’s monetary policy — the setting of short-term interest rates and management of the money supply — historically hasn’t been overseen by the executive branch

More precisely, setting interest rates isn’t an “executive power.” Article II says: “The executive Power shall be vested in a President of the United States of America.” So the question is whether the Fed is exercising the executive power.

The Fed doesn’t set interest rates as a government agency ordering private actors to do what the government says. Instead, it acts as a private market participant to influence the behavior of the private banks that transact with it: https://www.stlouisfed.org/in-plain-english/the-fed-implemen...

In this core rate-setting function, the Fed doesn’t have to be a government agency at all. This core rate setting function doesn’t involve prosecuting people, creating regulations with the force of law, or otherwise using the coercive power of government to control private conduct. The fed does some of these things through banking regulations, but they’re ancillary to this rate setting function. You could spin those functions off into a government agency subject to presidential control without affecting the independence of the core rate setting function.

Fun fact: the Chinese central bank is not at all independent, but one-party rule prevents monetary policy from becoming incoherent as a result of short-term political interests tied to the election cycle.

An independent central bank fixes this in a democracy, but now it can exert considerable influence over political outcomes.

Consider that Carter was punished by the public in his re-election campaign for a recession which was ostensibly caused by Federal Reserve policy choices which ultimately benefited Reagan.

The "historical tradition" justification for rulings the Supreme Court seems to favor in recent years when determining if something is constitutional is fascinating. Presumably this court would have ruled that the original Bank of the United States was unconstitutional since it had no "tradition" of existence at that point in time. I guess new traditions were made unconstitutional around 1850 and the existing ones were grandfathered in.

>Peter Conti-Brown, a professor of financial regulation at the University of Pennsylvania, added, “I’ll say as a legal scholar and as a historian I think that differentiation is hocus pocus.”

I'm willing to bet that the "hocus pocus" is the Court not wanting financial markets to get upended by giving the president the ability to fire Fed governors even if this is contradictory to previous decisions of theirs.