> 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.
Say Linus Torvolds wrote legally binding rules for the design of the Linux kernel. How he designed the Linux kernel after writing those rules would be quite relevant to what the rules mean, right?
Here, the first sentence of Article II says: “The executive Power shall be vested in a President of the United States of America.”
You can say this isn’t a categorical dictate and there’s exceptions. One way to support that is by saying the founders created an independent central bank immediately, so they thought it wasn’t covered by this rule. But as you recognize, the founders could have just been breaking the rule. But that leads you to the conclusion that the central bank isn’t permissible.
The court could have just as easily have cited Framers that opposed the creation of the Bank as evidence the Constitution did not permit it. Or cited Jackson's strong opposition to the Bank as an example of there being a tradition of the executive taking control of monetary policy. My point is that the historical argument is arbitrary; you can pick and choose which examples get to be considered part of the canonical tradition to support preconceived conclusions (e.g. "the President shouldn't be allowed to interfere with an independent agency (the Fed)" or "the President should be allowed to interfere with an independent agency (the FTC)").
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.
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.