Scott Alvarez, who served as the Fed’s general counsel for more than a decade until 2017, said Powell may be protected thanks to changes Congress made to the law four decades ago.

Up to that point, the president simply named the Fed chairman from among governors already confirmed by the Senate. But in 1977, lawmakers amended the act, requiring the Senate to confirm chair and vice chair nominees for four-year terms separately from the confirmation of their governorships, which run as long as 14 years.

Alvarez said the courts would likely interpret the 1977 change as removing not only the president’s unilateral authority to name the chair, but also the ability to dismiss him or her without cause. There is, however, no precedent for such a move and no way to know how the courts would rule if the Fed, or Powell himself, challenged the demotion.

Frustrated President

The White House legal team developed its analysis after Trump in December privately discussed firing Powell following an interest rate increase that roiled global financial markets. The Fed has raised rates seven times since Trump took office.

Fed policy makers are meeting Tuesday and Wednesday. No rate move is expected immediately, though economists and investors generally agree the central bank will cut borrowing costs this year.

Powell, who became chairman in February 2018, has drawn Trump’s ire for not being more accommodating of his trade war with China. The president has repeatedly complained that the Fed, under Powell, has stymied growth and financial markets by raising rates.

“He’s my pick -- and I disagree with him entirely,” Trump said last week in an interview with ABC News. “Frankly, if we had a different person in the Federal Reserve that wouldn’t have raised interest rates so much we would have been at least a point and a half higher.”

Trump had a casual dinner with Powell and Fed Vice Chairman Richard Clarida in February, Treasury Secretary Steven Mnuchin said at the time. The Fed released a statement shortly after the meeting saying that the group discussed the U.S. economy’s performance and outlook, but that Powell didn’t share his expectations for monetary policy.

‘Law Is Clear’