The Fed just ‘Trump-proofed’ itself with a unanimous move to preempt a potential leadership shakeup

Core Viewpoint - The Federal Reserve's early reappointment of 11 out of 12 regional bank presidents alleviated market concerns regarding the potential loss of the Fed's independence amid President Trump's calls for steeper rate cuts [1][6]. Group 1: Reappointment Details - The reappointments were announced ahead of the presidents' five-year terms ending in February, which is atypical as previous reappointments usually occurred closer to expiration dates [2]. - The only exception in the reappointment was the Atlanta Fed chief, Raphael Bostic, who had previously announced his resignation [1]. Group 2: Political Context - Recent suggestions from the Trump administration, including a proposed three-year residency requirement for Fed presidents, raised concerns about a potential leadership overhaul within the Fed [3][4]. - The balance of power on the Fed board could shift with Trump appointees, potentially allowing for a reshaping of the Fed presidents [4]. Group 3: Market Reactions - Following the reappointment announcement, the 10-year Treasury yield increased as bond investors anticipated fewer rate cuts [7]. - The Fed board currently includes three Trump appointees, with Jerome Powell's term as chairman expiring in May, and the Supreme Court's decision on whether Trump can fire Governor Lisa Cook could further influence the board's composition [7].