The board of the Federal Reserve System said Thursday that it had reappointed all regional Fed bank presidents, just days after the Trump administration began suggesting that it wanted to make major changes to the reappointment process.
Regional bank presidents in the Fed’s 12 districts across the country wield nearly as much influence over interest rates as the seven permanent, Senate-confirmed Fed governors do.
Treasury Secretary Scott Bessent said Dec. 3 that he planned to propose a new rule related to appointing regional Fed presidents.
“I am going to start advocating, going forward, not retroactively, that regional Fed presidents must have lived in their district for at least three years,” Bessent said at a conference hosted by The New York Times’ DealBook.
Bessent suggested that Federal Reserve Chairman Jerome Powell and the board had the authority to effectively say that “unless someone has lived in the district for three years, we’re going to veto them.”
Bessent said that he had not formally suggested the new rule but that the Fed could do it itself.
Treasury Secretary Scott Bessent; National Economic Council Director Kevin Hassett.Getty Images
Stephen Miran, who is on temporary leave from the White House to serve as a Fed governor, joined Powell and the other governors in voting for all of the reappointments.
The Fed’s vice chair for supervision, Michelle Bowman, and governor Christopher Waller, both appointed by Trump during his first term, also voted in favor.
It was unclear how many current regional Fed presidents Bessent’s proposed rule might have affected. Many have previously held roles on Wall Street, at major corporations and at the New York Federal Reserve Bank soon before they assumed their current positions at regional Feds around the country.
The last time the Fed carried out the typically mundane reappointment process in 2021, it did so in January, so Thursday’s announcement was earlier than expected.
Typically, reappointments must be completed by the end of February.
In a recent interview, Trump’s National Economic Council director, Kevin Hassett, backed Bessent’s proposal, a sign that the proposal could gain steam. Trump has suggested that Hassett may be his top choice to replace Powell as chairman of the central bank in May.
The Fed said in a statement Thursday that the approvals came after “a comprehensive review by the boards of directors of the regional Reserve Banks.”
The Trump administration has attacked the Fed and its chair on a nearly constant basis since it returned to power in January.
Thursday’s announcement is very significant for the central bank, because the Fed’s interest rate-setting committee is made up of governors and the president of the Federal Reserve Bank of New York, as well as four other regional bank presidents. Those four regional bank presidents rotate annually.
Regional presidents of Federal Reserve banks are selected by a panel of executives at nonprofit groups and businesses in districts around the country and then approved every five years by the central bank’s board of governors.
After Trump initially tried to fire Fed governor Lisa Cook this summer, he predicted that he would soon have a “majority” on the board of governors and that through that majority he would see to it that interest rates were quickly lowered.
While Cook has so far successfully challenged her firing, Trump’s suggestion raised concerns that the administration might try to stack the deck of regional Fed presidents by blocking some reappointments.
“Once we have a majority, housing is going to swing, and it’s going to be great,” Trump said Aug. 26.
The Supreme Court will hear oral arguments in Cook’s case in January.
