The most interesting Federal Reserve decision of the Trump presidency will likely be June 17, 2026.
It is a meeting that contains economic projections and will also be the first meeting chaired by Trump’s FOMC chairman. He often lamented his choice of Powell, in part because the Fed chairman took a hard line against political interference in the setting of interest rates.
Expect the next Fed chairman to be very closely aligned with Trump.
On Wednesday, Bloomberg sources released several names and singled out one person who will not be considered:
Fed Governor Christopher Waller, previously considered a possibility for the chairmanship, may no longer be a serious consideration after backing a half-point interest rate cut in September, the people familiar with the matter said. Trump called the Fed’s larger-than-usual tapering just weeks before the presidential election “a political move to try to keep somebody in office.”
Names under consideration are:
- Kevin Hassett, who is currently slated to be the director of the White House National Economic Council
- Larry Lindsey, former George W. Bush White House official
- Marc Sumerlin, former George W. Bush White House official
- David Malpass, former president of the World Bank
- Kevin Warsh, former Federal Reserve official
- Fed Governor Michelle Bowman
Let’s start with Bowman, because that highlights another interesting level of intrigue. Trump appears to have successfully ousted Michael Barr from his Fed oversight role. However, Barr has refused to step down entirely and has said he will stay on as a full-time Fed governor for his term, which expires in 2032.
That means Trump will have to pick someone currently at the Fed to take over the oversight role. The obvious choice is Bowman, a Trump appointee, a lifelong Republican with extensive banking experience, whose family owns Farmers & Drovers Bank and was a Kansas State Bank trustee.
Trump said he would make a choice very soon because Barr will leave the role on Feb. 28 or whenever a successor is confirmed.
Besides that, Trump will have only one other change at the Fed (besides the resignation) and that is to replace Adriana Kugler, whose term expires next January. She is a dove and was Obama’s chief economist at the Department of Labor.
However, this means that the composition of the Board at the meeting in June 2026 will be
- A new armchair
- Sub for Kugler
- Bowman
- Waller
- Barr
- Jefferson
- Cook
The latter trio are all Biden appointments.
Before this point, the Fed is complex enough to avoid any political influence (or depending on how you want to see it, maintaining its current bias).
In 2026, the voters are:
- NY Fed President Williams
- Whoever the Philly Fed appoints to replace Harker
- Minneapolis Fed President (currently Kashkari)
- Dallas Fed President (currently Logan)
- President of the Cleveland Fed (currently Hammack)
Democrats are in bold, but there is some gray area on others. Kashkari, for example, was Hank Paulson’s Republican and was a social advocate. Logan’s politics are unclear.
What do I think is going on?
I think it’s all a bit ridiculous. They are all serious people and may have some political biases, but it is not (after all) the Supreme Court where all decisions fall along party lines. These are professionals who want to get policy right and know that any policy move to lower short-term rates will only mean higher rates later.
It is also noticeable that in 2027 the votes go to Chicago, San Francisco, Atlanta, Richmond. Given the inclinations of those banks (especially those presidents who are now there), it could restore the balance of power. But keep in mind that 2026 requires a lot of reappointments.
Anyway, all this says is that there are people trying to make everything political, but even if one really wanted to politicize the Fed, it will be extremely difficult to do so under Trump.