On Friday, one of Donald Trump’s key economic advisers gave a thumbs-up to a proposal that would allow the purging and replacement of the Federal Reserve’s regional bank presidents, allowing the president to stack the deck in his favor.
At the New York Times’s DealBook Summit on Wednesday, Treasury Secretary Scott Bessent floated the change, suggesting the presidents should reside “in their districts for at least three years before taking office,” Al Jazeera is reporting.
The report added that Bessent insisted, “there is a disconnect with the framing of the Federal Reserve” before adding, “unless someone has lived in their district for three years, we’re going to veto them.”
“The Fed has a complicated structure that includes a seven-member board of governors based in Washington as well as 12 regional banks that cover specific districts across the US. The system, set out in the Federal Reserve Act, was designed to ensure that US central bank policy reflected input from officials from around the country, not just political appointees based in Washington,” the report states before adding there are no residency requirements based upon a belief that the appointees should be hired based upon merit.
Bloomberg News is reporting that Trump economic adviser Kevin Hassert agreed with Bessent and called for a residency requirement.
That led economics analyst and MS NOW host Catherine Rampell to raise a red flag.
Linking to the Bloomberg report posted to X, she wrote, ”Yeah this is bad. Trump admin appears to be laying the groundwork to purge regional Fed presidents, all of whom are up for reappointment in February.”
Asked by a commenter on X, “He needs a majority of governors on the board (which he may well get) to vote them out, tho, correct? (Or fail to reappoint them),” she replied, “Correct, regional Fed presidents have to get approved by Fed Board in DC. Usually a pro forma thing.”
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