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The US Federal Reserve’s Michael Barr said he plans to step down as vice chair of supervision next month, leaving the key seat open for President-elect Donald Trump to quickly steer his bank deregulation agenda.
Current Fed Governor Michelle Bowman, who’s been a dissenting voice on the Fed Board lately when it comes to decisions on interest rates and bank capital rules, stands as a top candidate for the seat, said several sources familiar with the matter.
Bowman turned heads in November for criticizing what she saw as the board’s too-steep rate cut decision on the heels of a presidential election (during a speech in West Palm Beach, Florida) and has cautioned against heavier bank regulation, including the proposed Basel III “endgame” reforms that would raise capital requirements for the biggest US lenders.
Bowman is scheduled to speak on monetary policy and “lessons for banking regulation” on Thursday. A Fed spokesperson declined to comment.
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Initially appointed by Trump, Bowman was an executive at her family-owned community bank, and her views closely align with the deregulation agenda that took several years into Trump’s first term to begin implementing. Trump also nominated Fed Chairman Jerome Powell, though he’s since been at odds with both Powell and Barr over rate decisions. Barr will resign from the supervision seat on Feb. 28 but remains on the board for his term that runs through January 2032, though it’s unclear if he will stay on for that entire period.
Unlike Trump’s last term, which was fraught with legal battles over the leadership of various agencies, he now has greater leeway to act on his first day when it comes to regulating the financial system since all four bank agencies will have available seats to fill, and a Republican majority to help confirm nominees. The Federal Deposit Insurance Corporation’s long-standing Chairman Marty Gruenberg plans to resign on January 19 and the Office of the Comptroller of the Currency has operated with an acting comptroller since 2021. Trump also now has the upper hand with the Consumer Financial Protection Bureau after the Supreme Court gave the president power to fire its director without cause in 2020.