Trump Nominates Michelle Bowman as Vice Chair for the Fed

President Donald Trump has nominated Federal Reserve Governor Michelle Bowman to assume the position of vice chair for supervision. This decision has garnered widespread approval from both Wall Street banks and smaller lenders, who are hopeful for a more industry-friendly approach under her leadership.

Expertise in Inflation, Regulation, and Banking

Trump praised Bowman for her exceptional service on the Fed’s Board of Governors since 2018. “Miki has served with distinction, bringing invaluable expertise in dealing with inflation, regulation, and banking,” Trump remarked in a social media post.

Relaxing Banking Regulations

If confirmed by the U.S. Senate, Bowman is expected to advocate for relaxed banking regulations, especially when compared to her predecessor, Michael Barr. She has already voiced her opposition to a 2023 proposal that would require banks to hold additional capital.

Challenges with Executive Orders

Bowman’s new role will also involve navigating the challenge of an executive order issued by Trump in February. This order limits the authority of independent agencies, requiring the Fed to submit draft regulations related to supervision for White House approval, while collaborating on other priorities, excluding monetary policy.

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Industry Optimism Following the Nomination

David Solomon, CEO of Goldman Sachs, expressed confidence in Bowman’s appointment, stating it could help banks move forward, inject capital into the system, and support economic growth.

Continuity and Expertise at the Fed

Aaron Klein of the Brookings Institution described Bowman as an “experienced insider” who ensures continuity at the Federal Reserve. She has deep experience in banking, having previously served as Kansas’ state bank commissioner and vice president at Farmers & Drovers Bank.

Filling the Vacancy Left by Michael Barr

This appointment fills the position vacated by Michael Barr, who resigned earlier this year amid tensions with Trump. Barr remains a member of the Fed’s Board of Governors.

A Significant Departure, Yet Not an Outlier

Ian Katz, managing director at Capital Alpha Partners, said Bowman’s appointment departs from Barr’s approach. However, she aligns with traditional Republicans at the Fed. Katz emphasized Bowman is not an outlier in this context. Her views fit within the broader Republican perspective at the Fed.