This is obviously alarming, and if used to disregard the Judiciary's interpretation of law, unconstitutional. But I'm puzzled by the exemption of the Federal Reserve and FOMC. He's previously beefed with them, and would presumably find the additional leverage useful. Why explicitly exclude them?
This simplifies some things (like the fact that congress can beat the executive by overriding a veto), but I think generally captures the essence of the system. And a key point here is that judicial beats executive. The executive can interpret a law however they want, but if the judiciary disagrees then the judiciary wins. So nothing needs to be "used" to disregard the judiciary's interpretation of laws - it simply doesn't matter what the executive's interpretation of a law - that's the role of the judiciary.
The reason for this law is simply to bring the various agencies under executive authority in line. Instead of each individual organization interpreting the law (generally around the limits of their powers) at their own discretion, those interpretations will now need to pass through the attorney general.