The surprise departure of Federal Reserve vice chair for supervision Michael Barr is focusing new attention on Michelle Bowman, named by analysts as the person most likely to become the Fed’s new top banking cop.
The conservative Fed governor and former state banking commissioner of Kansas “seems like the likely choice,” Stifel chief Washington policy strategist Brian Gardner said in a note Monday.
Bowman “is the logical candidate,” added TD Cowen’s Jaret Seiberg in a separate note.
What helps Bowman’s chances, according to analysts, is that there currently is no empty seat on the Fed’s board of governors for Trump to fill with an outsider. Barr said he will remain as a Fed governor until his term is up in 2032.
So Trump either has to leave the Fed vice chair for supervision position empty until Fed governor Adriana Kugler’s term expires Jan. 31, 2026, or nominate an existing Fed governor to the post. Bowman would fit that qualification.
Bowman, if selected, could take the regulation of the nation’s largest banks in a new direction.
She opposed some of the proposals put forward by Barr, including a new set of controversial capital rules proposed by top bank regulators that would require lenders to set aside greater buffers for future losses.
The requirements are based on an international set of capital requirements known as Basel III imposed in the decade following the 2008 financial crisis.
Banks have been fighting this US proposal for the last year in an aggressive public campaign and even dropped hints about suing regulators if they don’t get their way.
Bowman has argued that the plan needed “substantive changes” and that an increase in capital requirements at the scale proposed by regulators could significantly harm the economy.
She wanted the Fed to tailor capital requirements to a bank’s size and risk profile as the regulator does now, arguing that she hasn’t seen compelling evidence that changing this approach would bolster the banking system.
Bowman “would lead any B3 re-write in a different direction,” said Stifel’s Gardner. “If there was any doubt,” the Basel proposal initially pushed by Barr “is dead.”
But Seiberg of TD Cowen said “this is less of a victory for the big banks than it may appear.”
He noted that “Democrats will retain their majority on the Federal Reserve Board until early 2026. And it is hard for us to see much getting done on the deregulatory side this year given the need to confirm new regulators.”
Bowman was appointed to the Fed’s board of governors by Trump during his first term in office in November 2018 to fill an unexpired term ending January 2020. She was reappointed in January 2020 and is serving a term that ends in January 2034.
Before the Fed, she was the state bank commissioner of Kansas and vice president of Farmers & Drovers Bank in Council Grove, Kan.
Bowman also previously worked for Senator Bob Dole of Kansas from 1995 to 1996 and Homeland Security Secretary Tom Ridge from 2003 to 2004, in addition to other roles in Washington policy circles.
She attracted a lot of attention last fall when she became the first Fed governor to dissent against a monetary policy decision since 2005.
She voted against a 50 basis point rate cut because she was worried inflation was not yet fully under control.
“I see the risk that the Committee’s larger policy action could be interpreted as a premature declaration of victory on our price stability mandate,” Bowman said at the time.
She also said she was worried that a 50 basis point reduction would send the signal that central bank policymakers see economic weakness ahead.
Bowman voted in favor of a smaller cut in December despite evidence inflation remained stuck at the same level this past fall.
Bowman is expected to offer some new comments about monetary policy and bank regulation while speaking this Thursday.
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