By CHRISTOPHER RUGABER, Associated Press Economics Writer

WASHINGTON (AP) — Donald Trump has stepped up his attacks on Federal Reserve Chair Jerome Powell at the same time that the Supreme Court is considering a case that could make it easier for the president to fire him.

The developments are occurring against a backdrop of wider turmoil in the economy and financial markets, brought on by Trump’s sweeping taxes on imports. Most economists worry that an assault on the Fed’s longstanding independence from politics would further disrupt markets and add to the uncertainty enveloping the economy.

In comments at the White House Thursday, Trump suggested he has the power to remove Powell and criticized him for not aggressively cutting interest rates.

“If I want him out, he’ll be out of there real fast, believe me,” Trump said. “I’m not happy with him.”

All the scrutiny threatens the Fed’s venerated independence, which has long been supported by most economists and Wall Street investors. Here are some questions and answers about the Fed.

Why does the Fed’s independence matter?

The Fed wields extensive power over the U.S. economy. By cutting the short-term interest rate it controls — which it typically does when the economy falters — the Fed can make borrowing cheaper and encourage more spending, accelerating growth and hiring. When it raises the rate — which it does to cool the economy and combat inflation — it can weaken the economy and cause job losses.

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Economists have long preferred independent central banks because they can more easily take unpopular steps to fight inflation, such as raise interest rates, which makes borrowing to buy a home, car, or appliance more expensive.

The importance of an independent Fed was cemented for most economists after the extended inflation spike of the 1970s and early 1980s. Former Fed Chair Arthur Burns has been widely blamed for allowing the painful inflation of that era to accelerate by succumbing to pressure from President Richard Nixon to keep rates low heading into the 1972 election. Nixon feared higher rates would cost him the election, which he won in a landslide.

Paul Volcker was eventually appointed chair of the Fed in 1979 by President Jimmy Carter, and he pushed the Fed’s short-term rate to the stunningly high level of nearly 20%. (It is currently 4.3%). The eye-popping rates triggered a sharp recession, pushed unemployment to nearly 11%, and spurred widespread protests.

Yet Volcker didn’t flinch. By the mid-1980s, inflation had fallen back into the low single digits. Volcker’s willingness to inflict pain on the economy to throttle inflation is seen by most economists as a key example of the value of an independent Fed.

What do Wall Street investors think?

An effort to fire Powell would almost certainly cause stock prices to fall and bond yields to spike higher, pushing up interest rates on government debt and raising borrowing costs for mortgages, auto loans, and credit card debt.

Most investors prefer an independent Fed, partly because it typically manages inflation better without being influenced by politics but also because its decisions are more predictable. Fed officials often publicly discuss how they would alter interest rate policies if economic conditions changed.

If the Fed was more swayed by politics, it would be harder for financial markets to anticipate — or understand — its decisions.

So does that mean the Fed is completely unaccountable?

Well, no. Fed chairs like Powell are appointed by the president to serve four-year terms, and have to be confirmed by the Senate. The president also appoints the six other members of the Fed’s governing board, who can serve staggered terms of up to 14 years, though most governors leave before the end of their terms.

Chair of the Board of Governors of the Federal Reserve System Jerome Powell speaks during an event hosted by the Economic Club of Chicago, Wednesday, April 16, 2025, in Chicago. (AP Photo/Erin Hooley)

Those appointments can allow a president over time to significantly alter the Fed’s policies. Former president Joe Biden appointed five of the current seven members: Powell, Lisa Cook, Philip Jefferson, Adriana Kugler, and Michael Barr. As a result, Trump will have fewer opportunities to make appointments. He will be able to replace Kugler, who filled an unexpired term ending Jan. 31, 2026.

Congress, meanwhile, can set the Fed’s goals through legislation. In 1977, for example, Congress gave the Fed a “dual mandate” to keep prices stable and seek maximum employment. The Fed defines stable prices as inflation at 2%.

The 1977 law also requires the Fed chair to testify before the House and Senate twice every year about the economy and interest rate policy.

But can the president fire Powell?

Powell says the law establishing the Fed does not allow a president to fire a chair except for cause. There is some complication in that Powell was separately appointed as a member of the Fed’s board of governors, and then elevated to the position of chair — by Trump, in 2017.

Most legal scholars agree that Trump can’t fire Powell from the Fed’s board of governors, but there is less agreement over whether a president can remove him as chair. In January, Michael Barr, who was vice chair for supervision, stepped down from that post but remained on the board to avoid a potential legal clash over whether Trump could fire him.

Should Trump try to fire Powell anyway, the ensuing fight would almost certainly end up at the Supreme Court.

What could the Supreme Court do?

We may get an early sign of how the Supreme Court would decide it this summer. There is already a case before the court on the issue of whether the president can fire top officials at independent agencies.

The case stems from Trump’s firings of two officials, one from the National Labor Relations Board and the other from an agency that protects workers from political interference. The Supreme Court last week let the firings stand while it considers the case. It could rule this summer that the president, as the head of the executive branch, could fire officials at any federal agency even if Congress had intended it to be independent.

The case would overturn a 90-year old precedent known as Humphrey’s Executor, in which the court ruled that the president couldn’t fire such officials.

Powell said Wednesday he is watching the case closely, adding that it might not apply to the Fed. Lawyers for the Trump administration, seeking to narrow the focus of the case, have argued that it doesn’t involve the Fed.

Both the Trump administration and the Supreme Court justices have carved out exemptions for the Fed before. In February, the White House issued an executive order that placed several financial regulatory agencies, including the Fed and the Securities and Exchange Commission, more directly under the president’s control. Yet the order specifically exempted the Fed’s ability to set interest rates from that order.

And in a case in 2023, Justice Samuel Alito said in a footnote that the Fed is a “unique institution with a unique historical background” that made it different than other independent bodies. If the court does give presidents more power over the heads of independent agencies, it could potentially exempt the Fed.

SAN JUAN, Puerto Rico (AP) — Power was restored to 98.8% of customers early Friday after an island-wide blackout hit Puerto earlier this week, authorities said.

More than 1.45 million customers had electricity less than 48 hours after the outage hit, according to Luma Energy, which oversees the transmission and distribution of power on the island.

“Although restoration is nearing completion, some customers may continue to experience temporary outages due to limited generation,” Luma said.

The blackout that hit Wednesday afternoon occurred after a transmission line failed and then caused generators across the island to protectively shut down, officials have said. It also left more than 400,000 customers without water at the time.

It wasn’t immediately clear what caused the failure, although authorities are investigating whether a series of breakers failed or if overgrown vegetation is to blame.

Gov. Jenniffer González said she expected to receive a preliminary report in upcoming days.

It’s the second massive blackout to hit Puerto Rico in less than four months. The previous one happened on New Year’s Eve.

By LEA SKENE, Associated Press

BALTIMORE (AP) — A federal judge on Thursday imposed new restrictions on billionaire Elon Musk’s Department of Government Efficiency, limiting its access to Social Security systems that hold personal data on millions of Americans.

U.S. District Judge Ellen Hollander issued a preliminary injunction in the case, which was brought by a group of labor unions and retirees who allege DOGE’s recent actions violate privacy laws and present massive information security risks. Hollander had previously issued a temporary restraining order.

The injunction does allow DOGE staffers to access data that’s been redacted or stripped of anything personally identifiable, if they undergo training and background checks.

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Hollander said DOGE and any DOGE-affiliated staffers must purge any of the non-anonymized Social Security data that they have received since Jan. 20. They are also barred from making any changes to the computer code or software used by the Social Security Administration, must remove any software or code they might have already installed, and are forbidden from disclosing any of that code to others.

“The objective to address fraud, waste, mismanagement, and bloat is laudable, and one that the American public presumably applauds and supports,” Hollander wrote in the ruling issued late Thursday night. “Indeed, the taxpayers have every right to expect their government to make sure that their hard earned money is not squandered.”

But that’s not the issue, Hollander said — the issue is with how DOGE wants to do the work.

“For some 90 years, SSA has been guided by the foundational principle of an expectation of privacy with respect to its records. This case exposes a wide fissure in the foundation,” the judge wrote.

During a federal court hearing Tuesday in Baltimore, Hollander repeatedly asked the government’s attorneys why DOGE needs “seemingly unfettered access” to the agency’s troves of sensitive personal information to uncover Social Security fraud.

Union members and retirees gathered outside the courthouse to protest DOGE’s actions, which they consider a threat to the future of Social Security benefits.

“What is it we’re doing that needs all of that information?” Hollander said, questioning whether most of the data could be anonymized, at least in the early stages of analysis.

Attorneys for the Trump administration said changing the process would slow down their efforts.

“While anonymization is possible, it is extremely burdensome,” Justice Department attorney Bradley Humphreys told the court.

He argued the DOGE access doesn’t deviate significantly from normal practices inside the agency, where employees and auditors are routinely allowed to search its databases.

But attorneys for the plaintiffs called it unprecedented and “a sea change” in terms of how the agency handles sensitive information, including medical and mental health records and other data pertaining to children and people with disabilities — “issues that are not only sensitive but might carry a stigma.”

The access alone is a privacy violation that causes harm to Social Security recipients, said Alethea Anne Swift, an attorney with the legal services group Democracy Forward, which is behind the lawsuit.

“That intrusion causes an objectively reasonable unease,” she said.

The Social Security Administration has experienced turmoil since President Donald Trump began his second term. In February, the agency’s acting commissioner Michelle King stepped down from her role after refusing to provide DOGE staffers with the access they wanted.

The White House replaced her with Leland Dudek — who failed to appear at Tuesday’s hearing after Hollander requested his presence to testify about recent efforts involving DOGE. The judge issued a letter last month rebuking Dudek’s threats that he might have to shut down agency operations or suspend payments because of Hollander’s temporary restraining order.

Hollander made clear that her order didn’t apply to SSA workers who aren’t affiliated with or providing information to DOGE, so they can still access any data they use in the course of ordinary work. But DOGE staffers who want access to the anonymized data must first undergo the typical training and background checks required of other Social Security Administration staffers, she said.

In recent weeks, Dudek has faced calls to resign after he issued an order that would have required Maine parents to register their newborns for Social Security numbers at a federal office rather than the hospital. The order was quickly rescinded. But emails showed it was political payback to Maine Gov. Janet Mills, a Democrat who has defied the Trump administration’s push to deny federal funding to the state over transgender athletes.

Despite the fraught political context surrounding the DOGE access case, Hollander admonished Humphreys when he suggested during Tuesday’s hearing that her questioning was starting to “feel like a policy disagreement.”

“I do take offense at your comment because I’m just trying to understand the system,” the judge said during Tuesday’s hearing.

Hollander, 75, who was nominated to the federal bench by President Barack Obama, is the latest judge to consider a DOGE-related case.

Many of her inquiries Tuesday focused on whether the Social Security case differs significantly from another Maryland case challenging DOGE’s access to data at three other agencies: the Education Department, the Treasury Department and the Office of Personnel Management. In that case, an appeals court recently blocked a preliminary injunction and cleared the way for DOGE to once again access people’s private data.

Hollander’s injunction could also be appealed to the 4th U.S. Circuit Court of Appeals, which sided with the Trump administration in other cases, including allowing DOGE access to the U.S. Agency for International Development and letting executive orders against diversity, equity and inclusion move forward.

ROME (AP) — U.S. Vice President JD Vance arrived in Rome on Friday for meetings with the Vatican No. 2 and Italian Prime Minister Giorgia Meloni, fresh off the Italian leader’s visit to the White House a day earlier.

Meloni, who has positioned herself as a bridge between the U.S. and Europe, received praise from President Donald Trump for her crackdown on migration during a meeting at the Oval Office on Thursday.

Vance, who attended the meetings, was scheduled to meet with the Italian leader Friday in Rome and planned to attend Easter weekend events at the Vatican.

He was scheduled to meet with the Vatican secretary of state, Cardinal Pietro Parolin, the White House said.

No meeting with Pope Francis was announced. The 88-year-old pope has sharply cut back his work schedule as he recovers from a near-fatal case of double pneumonia.

Francis and Vance, a Catholic convert, have tangled sharply over migration and the Trump administration’s plans to deport migrants en masse.

Just days before he was hospitalized, Francis blasted the administration’s deportation plans, warning that they would deprive migrants of their inherent dignity. In a letter to U.S. bishops, Francis also apparently responded to Vance directly for having claimed that Catholic doctrine justified such policies.

Vance has acknowledged Francis’ criticism but has said he would continue to defend his views.

Associated Press religion coverage receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content.