The Federal Reserve surprised markets by reappointing 11 regional bank presidents early, easing fears of independence loss amid Trump’s push for rate cuts. The Atlanta Fed chief position remains vacant as Raphael Bostic steps down. Recent suggestions from the Trump administration had raised concerns about potential leadership shakeups.

Treasury Secretary Scott Bessent proposed a three-year residency requirement for Fed presidents, supported by National Economic Council Director Kevin Hassett. The balance of power on the Fed board could shift with Trump appointees, potentially reshaping Fed presidents. Recent FOMC meetings showed resistance to rate cuts from Fed presidents and more aggression from Trump-appointed governors.

The reappointment of 11 reserve bank presidents removes concerns about disruption to the Fed’s structure and governance. The Fed board currently includes three Trump appointees. The Supreme Court may decide if Trump can dismiss Governor Lisa Cook, potentially allowing him to name a fourth governor.

Deutsche Bank strategist Jim Reid noted the 10-year Treasury yield rose after the Fed’s reappointment announcement, indicating fewer expected rate cuts. The decision to reappoint all Fed presidents early suggests a united front to maintain Fed independence. Analysts warn of potential threats to the Federal Reserve’s authority with Miran’s appointment.

The unanimous reappointment of all Fed presidents indicates Trump-appointed governors also supported the decision. Stephen Miran, currently on leave as the White House’s chairman of the Council of Economic Advisers, had previously advocated for an overhaul of the Federal Reserve to diminish its power in favor of the White House. JPMorgan warned that Miran’s appointment poses an existential threat to the Fed’s authority.

Read more at Yahoo Finance: The Fed just ‘Trump-proofed’ itself with a unanimous move to preempt a potential leadership shakeup