Washington, DC – President Donald Trump has announced his selection of Federal Reserve Governor Michelle Bowman to assume the central bank’s top supervisory role, following Michael Barr’s resignation as the Fed’s vice chair for supervision. Bowman, who has been serving on the Fed’s Board of Governors since 2018, is regarded as being more sympathetic to the banking industry, particularly in her approach to regulating small banks.
Bowman’s appointment comes amidst a backdrop of uncertainty within the Federal Reserve, with Fed Chair Jerome Powell expressing reservations about the supervisory position in Congressional testimony earlier this year. Powell has suggested that the creation of the vice chair for supervision has introduced volatility to the central bank, a role introduced in response to regulatory reforms following the 2008 financial crisis.
President Trump lauded Bowman’s expertise in inflation, regulation, and banking, expressing confidence in her ability to lead during a critical time for the economy. The announcement was made on Truth Social, a platform favored by the President for its direct communication to the public.
As the new Vice Chair of Supervision, Bowman will play a crucial role in shaping the oversight of the banking sector, with a focus on fostering economic growth and stability. Her background as a former bank executive and state regulator in Kansas positions her as a key figure in guiding the Fed’s regulatory agenda moving forward.
The Financial Select Sector SPDR Fund (XLF) has experienced significant gains since Trump’s election, reflecting market optimism surrounding expectations for less stringent regulation under the current administration. Despite this, Bowman’s appointment raises questions about the future direction of the Fed’s regulatory approach and its impact on the broader financial industry.
In her capacity as a Fed governor, Bowman also holds a seat on the Federal Open Market Committee, which determines the central bank’s benchmark interest rate. With the committee scheduled to meet this week, all eyes will be on Bowman as she navigates the complex landscape of monetary policy and financial regulation in the United States. Her leadership will be instrumental in shaping the Fed’s response to ongoing economic challenges and opportunities.