Trump Plans to Appoint Michelle Bowman as Fed Vice Chair

Former President Donald Trump plans to appoint Michelle Bowman, a current Federal Reserve governor, as the central bank’s vice chair for supervision. According to a close source, the announcement could come as early as Wednesday.

Vacancy Following Michael Barr’s Resignation

The position became vacant after Michael Barr, appointed by Joe Biden, stepped down earlier this year. Barr argued that a dispute with Trump over his tenure would distract from the Fed’s mission.

Trump Must Choose Among Current Members

The vice chair for supervision must be a member of the Fed’s Board of Governors. Since Barr did not leave his seat on the Board, Trump must select a successor from the current members or wait for a new vacancy. The White House has not commented on Bowman’s potential appointment.

Bowman’s Stance Against Banking Regulations

Bowman has criticized regulatory proposals aiming to increase capital requirements for large banks. The financial sector argues that such measures would hurt the competitiveness of U.S. banks compared to international counterparts.

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Debate Over Capital Requirements

In September, Barr announced adjustments that would cut in half the proposed 19% increase in capital requirements for major banks. However, Bowman insisted on a comprehensive overhaul of the regulations.

Powell and Regulatory Stability

Federal Reserve Chair Jerome Powell told Congress in February that regulators will soon finalize the plan. He suggested banking regulations were steadier before creating the vice chair for supervision. Powell emphasized concerns about policy shifts since introducing the new role. He indicated that stability in financial oversight declined after implementing structural changes.

Bowman’s Background and Next Steps

A fifth-generation banker, Michelle Bowman previously served as Kansas banking commissioner and vice president of Farmers & Drovers Bank. She joined the Fed’s Board in 2018 and leads the central bank’s Subcommittee on Regional and Community Banking. In September, she voted against a more aggressive interest rate cut, favoring a more cautious approach. Her appointment must be confirmed by the U.S. Senate.