US Federal Reserve Governor Michelle Bowman attends a “Fed Listens” event at the Federal Reserve headquarters in Washington, DC, on October 4, 2019.
Eric Baradat | AFP | Getty Images
President Donald Trump announced Monday he has chosen Federal Reserve Governor Michelle Bowman to take over the central bank’s top supervisory role.
The announcement comes after Michael Barr resigned from his role as the Fed’s vice chair for supervision, though he remains a Fed governor.
In January, when Barr announced that he would step down, he said in a statement that “the risk of a dispute over the position could be a distraction from our mission. In the current environment, I’ve determined that I would be more effective in serving the American people from my role as governor.”
The elevation of Bowman gives Trump someone seen as more friendly to the banking industry in the top oversight role at the Fed. Bowman, a former bank executive and state regulator in Kansas, joined the central bank during Trump’s first term.
“I am pleased to announce that Michelle ‘Miki’ Bowman will be the Federal Reserve’s new Vice Chair of Supervision,” Trump said in a post on Truth Social. “Miki has been serving honorably on the Fed’s Board of Governors since 2018, and has great expertise dealing with Inflation, Regulation, and Banking. Our Economy has been mismanaged for the past four years, and it is time for a change. Miki has the ‘know-how’ to get it done. I am confident we will achieve Economic heights never before seen in our Nation’s History.”
Bowman takes over a role that Fed Chair Jerome Powell is not a big fan of. During Congressional testimony in February, Powell said that he thought the creation of the vice chair for supervision had created “volatility” for the central bank. The position was introduced as part of regulatory reforms after the 2008 financial crisis.
Bank stocks have outperformed the broader market since Trump’s election, likely in part because of expectations for lighter regulation on the sector. Since Nov. 5, the Financial Select Sector SPDR Fund (XLF) is up 5.1%, compared to a decline of nearly 2% for the S&P 500.
As a Fed governor, Bowman is also part of the Federal Open Market Committee, which sets the benchmark interest rate for the central bank. The committee is set to convene on Tuesday and Wednesday of this week, though it is widely expected to hold rates steady at this meeting.