What's at stake in the battle for reserve bank power

"Even after that, legal rulings indicate that the reserve banks' authority is downstream of the presidentially appointed Board of Governors - which translates into the broad ability to oversee hiring, firing, and budgets. State of play: The reserve bank presidents - who vote on a rotating basis on monetary policy and have extensive management responsibilities - are reappointed on a five-year calendar, a juncture at which the Board of Governors must approve each to remain in office."

"However, if President Trump appointees constitute a majority of the Board of Governors by early next year, it could be a ripe opportunity to try to shuffle bank presidents, seeking candidates more in line with the president's desires. If Trump wins his court battle to fire Fed governor Lisa Cook, and the Senate confirms both her replacement and Stephen Miran (Trump's nominee for a vacant seat), Trump appointees would be a majority of the committee (including sitting governors Christopher Waller and Michelle Bowman)."

"Waller and Bowman abstained from the vote to appoint Austan Goolsbee, a former adviser to President Obama, to lead the Chicago Fed in 2023, Bloomberg first reported. The private-sector boards of directors of the banks have added more members from nonprofits and labor unions in recent years, and a Manhattan Institute report found the board members' political giving has shifted to the left."

Legal rulings place reserve banks' authority under the presidentially appointed Board of Governors, giving the Board oversight of hiring, firing, and budgets. Reserve bank presidents vote on monetary policy and manage operations, and they face Board approval at five-year reappointment junctures. A looming reappointment deadline at the end of February creates an opportunity for Board-driven staff changes if a new presidential appointee majority emerges. If a majority of Board seats are filled by President Trump appointees, the Board could seek new presidents aligned with presidential priorities. Concerns exist among those appointees about research focuses on climate, race, and inequality.

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