"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""
"Bessent has stepped up his criticism of the Fed's 12 regional bank presidents in recent weeks after several of them made clear in a series of speeches that they opposed cutting the Fed's key rate at its next meeting in December. President Donald Trump has sharply criticized the Fed for not lowering its short-term interest rate more quickly. When the Fed reduces its rate it can over time lower borrowing costs for mortgages, auto loans, and credit cards."
"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, while four of the remaining 11 presidents vote on a rotating basis."
Treasury Secretary Scott Bessent proposed a requirement that Federal Reserve regional bank presidents must have lived in their districts for at least three years before taking office. He said he will veto nominees who do not meet that residency requirement. Bessent increased criticism after several regional presidents opposed cutting the Fed's key rate at the December meeting. The administration has pushed for lower short-term interest rates to reduce borrowing costs for mortgages, auto loans, and credit cards. The Federal Reserve has a seven-member board of governors and 12 regional banks, with all presidents participating in policy meetings and a subset voting on rates.
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