In a surprise move that closes an opening the Trump administration might have exploited to undermine its independence, the Federal Reserve’s governing board reappointed 11 of the Fed’s 12 regional bank presidents Thursday.
The resignation of Governor Adriana Kugler in August and the pending retirement of Atlanta Fed President Raphael Bostic had sparked speculation that the Trump administration might try to exert its influence over the appointments of regional bank presidents to get rid of “hawkish” presidents opposed to cutting interest rates.
The Federal Reserve’s interest rate decisions are made by the Federal Open Market Committee, which is made up of the seven members of the board of governors, the president of the New York Fed, and four other regional bank presidents who serve on the committee on a rotating basis.
The terms of all 12 presidents of the regional Federal Reserve banks are set to expire at the end of February. Each regional bank has its own board, which appoints a president, but those appointments are subject to approval by the Federal Reserve’s Board of Governors.
Kugler’s resignation gave Trump the opportunity to nominate Stephen Miran, formerly chair of the White House Council of Economic Advisers, to serve out the rest of her term. If Trump succeeds in ousting Federal Reserve Governor Lisa Cook, he will have appointed a majority of the Fed’s governing board.
The Trump administration has been weighing whether it could exert influence over the Fed’s governing board and veto the reappointment of regional Federal Reserve bank presidents it doesn’t agree with, Bloomberg News reported in August.
On Dec. 3, Treasury Secretary Scott Bessent said he favored instituting a requirement that regional bank presidents reside in the districts they represent for at least three years — a move that could have left the reappointment of three of the 12 regional presidents in doubt, the Associated Press reported.
By law, Federal Reserve Bank presidents serve five-year terms. When the Fed’s governing board signed off on the last round of reappointments in 2021, the vote took place in January, so Thursday’s vote was earlier than expected, NBC News reported.
All three of Trump’s appointees to the Fed’s board of governors — Miran, Michelle Bowman, and Governor Christopher Waller — joined the unanimous vote to reappoint the 11 current regional bank presidents (all but Bostic, who is retiring).
Federal Reserve Board Chair Jerome Powell’s term ends in May and a top Trump advisor, National Economic Council director Kevin Hassett, is the leading contender to replace him.
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