The Federal Reserve System’s board has reappointed all regional Fed bank presidents, despite recent suggestions from the Trump administration that it wanted to make changes to the reappointment process. The move comes after Treasury Secretary Scott Bessent proposed a new rule that would require regional Fed presidents to have lived in their district for at least three years before being appointed. Bessent suggested that the Fed could implement this rule itself, without needing congressional approval.
The reappointment of the regional Fed presidents is significant, as they wield considerable influence over interest rates, along with the seven permanent Fed governors. The Fed’s interest rate-setting committee is composed of governors and the president of the Federal Reserve Bank of New York, as well as four other regional bank presidents who rotate annually.
The Trump administration has been critical of the Fed and its chair, Jerome Powell, and has suggested that it wants to make changes to the central bank’s leadership. National Economic Council Director Kevin Hassett has backed Bessent’s proposal, and Trump has hinted that he may replace Powell as chairman of the central bank in May.
The reappointment of the regional Fed presidents was approved by the Fed’s board of governors, including Powell and other governors appointed by Trump. The move is seen as a significant development, as it suggests that the Fed is pushing back against the Trump administration’s attempts to exert influence over the central bank.
The Trump administration’s efforts to influence the Fed have raised concerns that it may try to stack the deck of regional Fed presidents by blocking some reappointments. However, the Fed’s decision to reappoint all regional Fed presidents suggests that it is committed to maintaining its independence and resisting political pressure.
The reappointment process is typically a mundane one, but this year’s announcement was earlier than expected. The Fed said that the approvals came after a comprehensive review by the boards of directors of the regional Reserve Banks. The move is seen as a significant victory for the Fed, which has been under pressure from the Trump administration to lower interest rates. The Supreme Court will hear oral arguments in January in a case related to the Trump administration’s efforts to fire Fed governor Lisa Cook, which has raised concerns about the administration’s attempts to exert influence over the central bank.