Atlanta Fed chief selection delay gives Warsh a say

The search to replace former Atlanta Fed President Raphael Bostic, who stepped down at the end of February, was well underway in the spring but was put on hold after it became clear the process couldn’t be completed before Warsh was sworn into office in late May, according to people familiar with the matter.

The process is also being eyed closely by key members of President Donald Trump’s economic policy team, including Treasury Secretary Scott Bessent and White House Economic Council Director Kevin Hassett, according to people familiar with the matter.

The delay in the selection process has raised questions among people inside and close to the central bank about the extent to which Trump administration officials may seek to influence the process.

The White House and Treasury Department didn’t reply to a request for comment. The Fed declined to comment. 

The search has examined many candidates. Among those who’ve been interviewed were Rebecca Patterson, a senior fellow at the Council on Foreign Relations; Marc Sumerlin, an economist who served as an economic policy adviser in the George W. Bush administration; and Michael Faulkender, a former deputy Treasury Secretary under Bessent, according to people familiar with the search. Those candidates either declined to comment or didn’t respond to requests for comment.

The search for Bostic’s replacement comes as Trump and the White House have explored ways to reshape the makeup of the central bank. In August, Trump became the first US president to attempt to fire a sitting Fed governor when he moved to oust Lisa Cook over unproven allegations of mortgage fraud. Cook sued to stay in her job in a case that has made its way to the Supreme Court, which is expected to issue a ruling in the coming days.

According to people familiar with the matter, administration officials are hoping the ruling will allow for Cook’s removal or provide a roadmap for future attempts to fire Fed governors.

High anxiety

Anxiety across the 12 regional banks was already high after Warsh promised to “break some heads” at the central bank if appointed to the Fed’s top job. Earlier this year, as his nomination and confirmation were playing out, the general counsels of the regional banks conferred over how easily reserve bank presidents could be removed by a majority vote of the Board of Governors, according to people familiar with the matter.

While the Federal Reserve Act stipulates that a majority can dismiss presidents if they communicate “in writing” the “cause of such removal,” the lawyers sought to fortify their understanding of the law amid increasing interest from the Trump administration in the role the reserve banks play in monetary policy, the people said.

Three of the seven current Fed governors were appointed by Trump, and the White House is looking for ways to find one more vacancy on the board in order to give Trump’s appointees a majority on that body, according to people familiar with the matter. Each of those three officials, however, has said it’s important for the Fed to maintain independence on monetary policy. 

Bessent and Hassett have also mused publicly about introducing a new requirement that candidates for regional Fed presidencies must have lived in that district for at least three years. Such a change could require Congressional action, Bessent has said.

Members of the Fed’s Board of Governors in Washington are nominated by the president and confirmed by the Senate. Regional Fed presidents, by contrast, are selected by their local boards of directors — excluding members who work at financial institutions — and approved by the Fed board.

It’s not unusual for the Fed chair or other Fed governors to provide input on potential regional bank presidents, and finalists for those posts are typically interviewed by Fed board members before their appointment.

Greg Haile, the chair of the Atlanta Fed’s board of directors who is running the search, said in a statement Friday the “committee is conducting a thorough and deliberate search for the next president of the Federal Reserve Bank of Atlanta. We maintain our focus on selecting the best candidate to serve the Sixth District, while protecting the integrity of the process.”

Haile added the group would “provide relevant updates about this important leadership role when appropriate.”

The 12 regional Fed presidents all participate in meetings on interest-rate decisions, but only five of them vote on rate decisions in any given year. The Atlanta Fed president is set to become a voting member at the start of 2027, when investors expect the Fed will be raising rates to curb high inflation.