Bessent says White House may 'veto' Fed presidents under a new residency rule

"Treasury Secretary Scott Bessent said Wednesday he would push a new requirement that the Federal Reserve's regional bank presidents live in their districts for at least three years before taking office, a move that could give the White House more power over the independent agency. In comments at the New York Times' DealBook Summit, Bessent said that "there is a disconnect with the framing of the Federal Reserve""

"The Federal Reserve seeks to keep prices in check and support hiring by setting a short-term interest rate that influences borrowing costs across the economy. It 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 United States. The seven governors and the president of the New York Fed vote on every interest-rate decision,"

Treasury Secretary Scott Bessent will push a requirement that Federal Reserve regional bank presidents must have lived in their districts for at least three years before taking office, and he said the White House will veto nominees who do not meet that standard. Bessent cited a perceived disconnect with how the Federal Reserve is framed after several regional presidents indicated opposition to cutting the Fed's key rate. The administration has criticized the Fed for not lowering short-term rates faster. The Fed comprises a seven-member Board of Governors and 12 regional banks; all regional presidents participate in interest-rate meetings while a subset vote on policy.

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