March 1. That’s the deadline for confirming regional Fed presidents, and it matters because the Trump administration’s still hard at work devising strategies for hijacking monetary policymaking in the US. (Or “exerting more control over the process,” if the term “hijacking” is too caustic for your tastes.)

Donald Trump, unsatisfied with the opportunity to install a sycophant as chairman of a board that already has three pliant members in Stephen Miran (or whoever replaces him), Chris Waller and Miki Bowman, is still angling to remove Lisa Cook.

One goal, some allege, in remaking the Fed board in the image of Trump’s personality cult is to muscle in on the (re)confirmation process for regional Fed presidents, thereby gaining a measure of control over the composition of the entire FOMC. Typically, the confirmation process is a rubber-stamp exercise, but it doesn’t have to be.

Of course, barring another attempt to remove Jerome Powell early, Trump’s Fed chair pick won’t be in place until June, and it seems far-fetched to suggest that anyone other than a Miran-type would participate in a scheme to freeze out or otherwise refuse to certify the regional Fed presidents.

But Trump — or, more accurately, Scott Bessent — has a plan for that. Last week, presumed Chair nominee Kevin Hassett threw his support behind Bessent’s idea to institute a residency requirement for the regional Fed chiefs. The new rule would mandate that all candidates have to reside for at least three years in the district for which they’re nominated.

This is another one of those proposals which sounds like a good idea (i.e., it promotes geographic diversity on the FOMC, and thereby ensures every part of the country gets a say on policy by proxy, through a resident of their region) until you consider the context. Plainly, this has nothing to do with a desire to promote a diversity of regional views and everything to do with giving Trump an inroad in case he wants to remove an FOMC member.

It’s a gambit, and it isn’t a sure bet. First, Bessent would have to formally propose the rule, then Congress would presumably need to decide whether it’s something they need to vote on. Bessent suggested the Fed Chair, along with the board, could just implement it overnight. “[They could] just say, unless someone’s lived in the district for three years, we’re going to veto them,” as he put it.

During the same remarks, Bessent was explicit that this would be a forward-looking policy and wouldn’t apply “retroactively,” a tacit nod to the idea that Trump wouldn’t be able to remove sitting regional Fed presidents in the event they don’t meet some new residency requirement.

But… well, you can understand why critics of the administration might be suspicious. Or concerned. Or both. Maybe the new rule isn’t retroactive in Bessent’s formulation, but one can certainly imagine Trump floating the idea of making it retroactive.

In their latest weekly, BMO’s excellent US rates team highlighted the figure below, which shows a Bloomberg Economics gauge that tracks the intensity of executive branch statements seen as encroachments on central bank independence. (The annotations are mine.)

“The index has been deeply negative by historical standards since Trump’s return to the White House, averaging a monthly print of -43 compare[d] to average monthly prints of nearly zero during the Biden and Obama presidencies,” the bank’s Ian Lyngen remarked.

As it happens, three regional Fed presidents who might not meet Bessent’s proposed residency requirement have all expressed skepticism about additional rate cuts.

Beth Hammack, who late last month suggested the Fed should keep policy at least mildly restrictive with inflation still running above target, was chosen to lead the Cleveland Fed in August of 2024 after a decades-long career at Goldman.

Lorie Logan, who on November 20 said she’d “find it difficult to cut rates again in December unless there is clear evidence that inflation will fall faster than expected” was chosen to run the Dallas Fed in August 2022 after two decades at the NY Fed in the Markets Group, including a stint managing the SOMA.

And Alberto Musalem, who some suspect could dissent at the December meeting in favor of leaving rates unchanged, became president of the St. Louis Fed in early 2024 after running a quant fund backed by Paul Tudor Jones. Before that, he spent three years at the New York Fed.

“The unfortunate thing about the current design of the Federal Reserve is that the only folks who always get a vote on interest rates are the people who live in Washington and the people who live in New York,” Hassett said this week. (That’s not true.)

Bessent, while speaking to Andrew Ross Sorkin, complained that regional Fed banks are in the habit of “importing a bright, shiny object” from the New York Fed.

Both Hammack and Logan will vote on policy in 2026.