June 17, 2026 is likely to be the most interesting Federal Reserve decision of the Trump Presidency.
That is a meeting that contains economic forecasts and it is also the first meeting chaired by FOMC Chairman Trump. He has often lamented his choice of Powell, in part because the Fed Chairman had gone against a political movement in setting rates.
Expect the next Fed Chair to be closely tied to Trump.
On Wednesday, Bloomberg sources launched several names and named one person who will not be considered:
Fed Governor Christopher Waller, previously considered a possibility for chairman, may not be under serious consideration after he backed a half-point interest rate cut in September, the people said. familiar Trump called the Fed cut more than usual, just weeks before the presidential election, “a political move to try to keep someone in office.” “
The names being considered are:
- Kevin Hassett, currently the director of the White House National Economic Council
- Larry Lindsey, a former White House official for George W. Bush
- Mark Sumerlin, a former White House official for George W. Bush
- David Malpass, former President of the World Bank
- Kevin Warsh, a former Federal Reserve official
- Fed Governor Michelle Bowman
Let's start with Bowman, because that shows another interesting level of intelligence. Trump has apparently removed Michael Barr from the Fed leadership role. But Barr refused to step down completely and said he would remain a regular Fed Governor for his term that ends in 2032.
That means that Trump will have to choose someone who is currently at the Fed to fill the leadership position. The obvious choice is Bowman, nominated by Trump, who has been a lifelong Republican and has an extensive background in banking, her family owns Farmers & Drovers Bank and she was a State Bank Commissioner Kansas.
Trump said he will make the choice very quickly because Barr will leave office on February 28 or when a successor is confirmed.
In addition, Trump only needs to make one more change at the Fed (barring his resignation) and that is to replace Adriana Kugler, who will expire next January. She is a dove and was Obama's chief economist at the Department of Labor.
Yes that means however that the members of the Board will be made at a meeting in June 2026
- New Fed Chairman
- Instead of Kugler
- An archer
- Waller
- Top
- Jefferson
- Cook
The last three are all Biden positions.
By now, the Fed is stacked enough to avoid any political impact (or depending on how you want to see it, maintaining its current bias).
In 2026, the voters will be:
- NY Fed President Williams
- Whoever the Philly Fed appoints to replace Harker
- President of the Minneapolis Fed (currently Kashkari)
- Dallas Fed President (currently Logan)
- Cleveland Fed President (currently Hammack)
The Democrats are the bold ones but others have some gray area. Kashkari, for example, was a Hank Paulson Republican and has been a social advocate. Logan's politics are unclear.
What do I think will happen?
I think it's all a bit silly. These are all serious people and may have some political leanings but not (yet at least) the Supreme Court where all decisions fall along partisan lines. These are professionals who want to get policy right and know that any political move to move short-term rates lower will not mean higher rates later.
It is also special that in 2027, the votes go to Chicago, San Francisco, Atlanta, Richmond. With the continuation of these banks (especially the current presidents), that could shift the balance of power back. But note that 2026 requires a lot of resets.
Anyway, all this to say that there are people who try to do it everything political but even if someone really wanted to politicize the Fed, it will be very difficult to do in Trump's term.
