Trump Side Preparing List for Fed Leadership Overhaul Including Powell

Advisors to President-elect Donald Trump are reportedly weighing candidates for a shake-up of the leadership at the central bank, the Federal Reserve (Fed).

On the 8th (local time), Bloomberg News cited sources familiar with the matter, reporting that Michelle Bowman, the Fed's top hawkish official, is highly likely to be promoted to the new Vice Chair for Supervision, succeeding Vice Chair Randal Quarles. Vice Chair Quarles announced his resignation from the vice chair position on the 6th but stated he would retain his seat as a Fed governor.

He will maintain the vice chair position until the end of next month, so the successor will be nominated during Trump's second term administration. Bowman, who is the leading candidate for the vice chair promotion, was nominated by President-elect Trump in 2018. Unlike Vice Chair Quarles, she opposes strong bank regulations.

Advisors to President-elect Trump are also reportedly compiling a list of candidates to succeed Jerome Powell, the Fed Chair whose term ends in May next year. They are closely monitoring current Fed officials' remarks on interest rates and adding or removing names from the candidate list accordingly. Chair Powell, who was directly nominated by President-elect Trump during his first term, has since clashed with Trump over interest rate policies and other issues.

According to Bloomberg, individuals under consideration by the Trump side as Powell's successor include Kevin Hassett, currently serving as Chairman of the White House Council of Economic Advisers; Larry Lindsey and Mark Summers, who worked in the White House during President George W. Bush's administration; former World Bank President David Malpass; and former Fed Governor Kevin Warsh.

Beth Hammack, President of the Cleveland Federal Reserve Bank, is also known to be a potential candidate for an important Fed governor position during President-elect Trump's second term. However, the next Fed governor vacancy is expected to arise only in January next year, when Governor Adriana Kugler's term expires.

Meanwhile, with Vice Chair Quarles deciding to retain his Fed governor seat, it will be difficult to recruit an external candidate for the vice chair position. The nomination must come from among the existing Fed governors. President-elect Trump said at a press conference on the 7th that he would soon announce Quarles' successor.