Reports indicate that President Donald Trump is considering plans to broaden his influence over the Federal Reserve, specifically by altering how the presidents of the 12 regional banks are selected and reappointed.
This initiative, first highlighted by Bloomberg News, may provide the administration with a means to affect those on the Fed’s influential policy-setting committee. Critics caution that this move could jeopardize the independence of the central bank.
Trump’s team is examining several possibilities, including how regional presidents undergo vetting since the Senate has not confirmed them, as reported by Bloomberg News.
The White House is potentially looking to leverage a rare five-year review set for February.
Another option under consideration involves the candidates put forward for the regional president’s position for the Fed chair, as sources familiar with the matter shared with Bloomberg.
Unlike the governors, local presidents are not nominated by the White House or confirmed by the Senate; their selection is a combination of local directors and the Federal Reserve board.
Trump’s aides are focusing on this process as a critical pressure point, according to Bloomberg.
Derek Tang, an economist at Lhmeyer/Moentary Policy Analytics, stated, “This White House is turning over every stone to see where they can change the Fed.”
The new Fed president is anticipated to be listed among current regional presidents come February.
Trump’s efforts to reshape the Fed follow his move to remove Governor Lisa Cook from the board, where she is seen alongside Federal Reserve Chairman Jerome Powell.
Allies of Trump believe that if he can gain a majority on the board, they could leverage that vote to remove officials deemed too Hawkish.
Lael Brainard, former Federal Reserve Vice-Chair, criticized this initiative as an “unprecedented attack on the independence of the Federal Reserve,” which has been crucial in managing inflation and adjusting long-term interest rates.
Since returning to the White House, Trump has been at odds with the Fed, expressing dissatisfaction with Chairman Jerome Powell even as the central bank has maintained its stance against inflationary effects from the president’s tariffs.
Powell’s term is set to expire in May, and Treasury Secretary Scott Bescent is in the process of interviewing candidates for his potential successor.
Critics argue that this campaign exemplifies a broader effort by Trump to infiltrate and control independent institutions, similar to changes made at the National Labor Relations Commission and the Equal Employment Opportunity Commission.
During a Cabinet meeting on Tuesday, Trump did not back down from his approach.
The president remarked, “If we had a majority, it would be great and the housing would be shaken. That would be great,” suggesting that current interest rates are excessively high.
The White House and the Fed have been approached for comments regarding these developments.
