- Key Insight: Expectations are building that the regional Fed president reappointments set for February will break from historical norms, with a higher likelihood of dissents from the board of governors expected at the very least.
- Expert Quote: "A couple of 'no's' or abstentions can illustrate that the reappointment process is not merely a rubber-stamping or cursory formality." — Derek Tang, CEO of Monetary Policy Analytics.
- What's at stake: The reappointment process, often described as "pro forma" and "opaque," is taking on greater political significance as the Trump administration seeks more influence over the Fed's rate-setting committee.
The mundane reconfirmation process of regional federal reserve bank presidents may be in for a shake-up come February.
Expectations are beginning to build that on Feb. 28, 2026, the typically routine vote by the Fed board of governors to confirm regional presidents could serve as a flashpoint for the ongoing power struggle between the White House and central bank, with the former already sowing doubts about whether regional Fed presidents should face greater board scrutiny.
Actual changes to the process may also be in the pipeline. Treasury Secretary Scott Bessent floated the idea Wednesday of
These developments come amid a yearslong campaign by President Donald Trump to
Fed watchers describe previous reconfirmation votes as being "opaque" and "pro forma," though there is debate about whether changes to the status quo could be beneficial.
Aaron Klein, senior fellow at Brookings Institution, notes that historically votes have almost always been unanimous, "even when they shouldn't have been." Now, he predicts there will likely be multiple dissents on some of the bank president reappointments, potentially split along political lines.
He said that if his prediction comes to pass, it will "portend big changes for the future," warning it could create a politically motivated whipsaw of regional presidents.
"Once you break that precedent, five years later, why wouldn't a Democratic-controlled board get rid of all of the Trump appointed presidents that occur in the interim?" Klein said. "Once precedent is broken, it's hard to put back." Precedent aside, some Fed watchers view a shake-up of the reappointment norm as a potentially welcome development. Derek Tang, CEO of Monetary Policy Analytics, said a more lively reappointment process can signal that the decision is being taken seriously by the board.
"If anything, a couple of 'no's' or abstentions can illustrate that the reappointment process is not merely a rubber-stamping or cursory formality," Tang said in a written statement. There are 12 regional Fed presidents, and each of them serve five-year terms that expire on Feb. 28 of years ending with a six or a one. The New York Fed president is a permanent voting member of the Federal Open Market Committee, while the other 11 regional presidents rotate onto the committee every second or third year
As a nod to that potential, Bessent said Wednesday that the Fed board should reject the appointment of regional Federal Reserve Bank presidents who have not resided in their districts for three years, potentially setting up a confrontation between the central bank and the administration when all 12 regional Fed reappointments come before the Fed board in February. "The chair and the board have the final say on who ... the regional bank boards can select," Bessent said speaking at the New York Times' DealBook Summit Wednesday. "So 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."
David Zaring, associate professor at University of Pennsylvania, said a residency rule could be reasonable for those seeking to serve as regional Fed presidents.
"Their pretty explicit charge to liaise with local business gives them different perspectives on the nature of the economic situation," said Zaring. "If that's a good thing — and I think it is — I don't really mind the idea that they should have lived in their districts for at least three years prior to appointment. That gives them some background for the local work they have to do." Zaring added that attaching such a requirement could make the roles harder to fill.
"One worry is that this will make the role of regional bank president harder to fill, especially when combined with the new ethics rules," he said. "It took 14 months to fill the vacancy at the Kansas City Fed. It also might considerably reduce the influence of Wall Street alumni on the board – I'm not sure if Beth Hammack could have been appointed to the Cleveland Fed with a 3 year residency rule, though I don't know her bio well."
Peter Conti-Brown, an associate professor of financial regulation at the University of Pennsylvania, wrote in
He wrote that he does not see the administration as being "motivated by good governance."
"The Federal Reserve's confused governance could be reasonably clarified in all kinds of ways, not at least by ensuring better geographic representation at the FOMC," he said. "But whatever else we do to the Fed, we must not eliminate its insulation from the personality of the president."
