Dive Brief:

• The Federal Reserve Board voted unanimously to reappoint 11 reserve bank presidents and 11 first vice presidents to new five-year terms, the central bank said Thursday.
• The vote came earlier than expected. The terms don’t expire until Feb. 28. But speculation had grown over the summer that the Trump administration would try to exert more influence over Fed regional banks.  
• Raphael Bostic, president of the Federal Reserve Bank of Atlanta, was the only regional chief whose term was not renewed. He announced in November he would retire when his term expires. 

Dive Insight:

Questions surrounding the fate of regional Fed presidents sprang up as President Donald Trump appeared to pressure central bank Chair Jerome Powell to resign amid an over-budget Fed headquarters renovation and reluctance to lower interest rates as quickly as the White House wanted.

Soon after, then-Fed Gov. Adriana Kugler resigned, and Trump attempted to fire Fed Gov. Lisa Cook over allegations of mortgage fraud. The Supreme Court, for now, has prevented the latter.

The Senate confirmed hard-line Trump ally Stephen Miran to serve out Kugler’s term and, around this time, some observers questioned if growing partisan dissonance on the Fed board may prompt some regional bank reappointments to draw dissent.  

“If anything, a couple of ‘no’s’ or abstentions can illustrate that the reappointment process is not merely a rubber-stamping or cursory formality,” Derek Tang, CEO of Monetary Policy Analytics, said in a note seen by American Banker.

For his part, Treasury Secretary Scott Bessent last week suggested that the Fed board should reject the appointment of any regional president who has not resided in their district for the past three years.

New five-year terms begin March 1. One regional bank president, the head of the New York Fed, votes on interest-rate decisions along with each of the Fed board members. Four of the other 11 regional Fed presidents fill out the Federal Open Market Committee each year on a rotating basis.

One regional first vice president, Ellen Bromagen of the Chicago Fed, was not reappointed because she, like Bostic in Atlanta, is retiring. Shonda Clay is set to become first vice president in Chicago for a term starting March 1.

Last December, the board of directors of each reserve bank began assessing their president’s and first vice president’s performance, evaluating their engagement with their local communities, their effectiveness in their roles including developing and implementing strategy, and their leadership contributions to the broader Fed system, the central bank said.

First vice presidents were assessed in their role as the chief operating officer of each reserve bank.

Typically, reserve bank presidents can serve until age 65 or for 10 years.