Bessent wants Fed regional chiefs to live where they serve, sparking debate on White House influence

US Treasury Secretary Scott Bessent says he plans to push for a new rule requiring Federal Reserve regional presidents to have lived in their districts for at least three years before taking office, a proposal critics say could widen White House influence over the central bank.

Speaking at the DealBook Summit in New York, Bessent argued the Fed has drifted away from the regional representation its structure was meant to guarantee.

“There is a disconnect with the framing of the Federal Reserve,” he said, adding that the administration would “veto” future nominees who haven’t lived in their district long enough.

His remarks come as several Fed regional presidents signalled opposition to cutting interest rates in December, a stance at odds with President Donald Trump, who has pushed for quicker rate reductions to lower borrowing costs for consumers.

If implemented, the residency requirement could shift power dynamics inside the Fed, an institution traditionally shielded from day-to-day political pressure. The Federal Reserve Act sets no residency rules for regional bank presidents, who are selected by their regional boards.

The Fed’s structure is split between seven Washington-based governors and 12 regional banks. The New York Fed president holds a permanent vote on interest-rate decisions, with four other regional presidents rotating seats annually.

Bessent has repeatedly argued that too many regional presidents come from outside their districts, sometimes from New York, weakening local input the system was designed to protect. “I’m not sure that’s the way the Federal Reserve was designed,” he said.

He is currently preparing to recommend a successor for Fed Chair Jerome Powell.