Supreme Court seems likely to give Trump more power over agencies

The Supreme Court, in Dec. 8 arguments, appeared inclined to side with the Trump administration in a case seeking to overturn or sharply curtail the 1935 Humphrey’s Executor precedent that limits a president’s ability to remove heads of multimember independent agencies; if upheld it could let presidents fire leaders of agencies such as the FTC, CPSC and FEC and shift significant regulatory authority from Congress to the White House. Conservative justices signaled sympathy for the unitary-executive argument and the Department of Justice urged the court that the old precedent is wrong, while liberal justices warned of unchecked presidential power; appellate experts say the court is likely to overrule or substantially narrow Humphrey’s Executor, though it may carve out different treatment for the Federal Reserve. A decision in Trump v. Slaughter is expected by the end of June, a ruling that would materially alter regulatory oversight and enforcement certainty across multiple sectors.

Analysis

The Supreme Court heard Dec. 8 oral arguments in Trump v. Slaughter asking whether to overrule the 1935 Humphrey's Executor precedent that limits a president’s ability to remove leaders of multimember independent agencies; Solicitor General John Sauer argued for broad removal power while FTC commissioner Rebecca Kelly Slaughter’s counsel warned the change would erase long-standing insulating structures. Conservative justices appeared sympathetic to the unitary-executive argument, with Chief Justice Roberts calling Humphrey’s a “dried husk,” while the court’s liberal justices, led by Justice Kagan, emphasized the risk of concentrating unchecked power in the presidency.

If the court overrules or substantially narrows Humphrey’s Executor, agencies such as the Federal Trade Commission, the Consumer Product Safety Commission and the Federal Election Commission could see leadership subject to presidential removal, shifting enforcement direction and accountability to the White House; the FTC’s role in antitrust and consumer protection touches “virtually every area of commerce,” increasing potential regulatory swing for many firms. Appellate expert Kevin King expects overruling but notes Kagan’s questioning could produce a narrower remedy, and the justices signaled the Federal Reserve might be treated differently.

The court allowed recent firings (including two Democratic FTC commissioners) to proceed while it decides the broader question and is expected to issue a decision by the end of June; that timetable makes regulatory-policy uncertainty a near-term risk. Related cases on the Fed, tariffs and birthright citizenship create additional legal catalysts that could further affect enforcement posture and market sentiment across regulated sectors.

Key Decisions for Investors

• Reassess exposure to companies subject to FTC antitrust and consumer-protection enforcement and consider hedges or position trims given the heightened risk of abrupt changes in enforcement direction
• Treat the Supreme Court decision (expected by end-June) and related cases as key catalysts for regulatory-driven volatility and avoid initiating large, regulation-dependent trades until the ruling narrows the likely outcome
• Monitor personnel changes and immediate agency actions (firings, emergency rulemakings) as early indicators of executive-directed enforcement; update compliance and litigation-cost scenarios accordingly
• Maintain extra risk controls for financials and firms engaged with the Federal Reserve since the Court signaled it may carve the Fed out for different treatment, prolonging uncertainty for those exposures