What Will the Federal Reserve Look Like in 2026?

Significant changes are anticipated for the Federal Reserve in 2026—but they’re not guaranteed to change the path of interest rates.

Jerome Powell’s term as the chair of the Federal Reserve’s Board of Governors is set to expire in May 2026 and President Donald Trump is already looking for a new leader of the central bank. The president has clashed with Powell publicly in the past year, and economists have been concerned that Trump is looking to interfere with the Fed’s independence.

Openings on the Federal Reserve Board will potentially allow President Trump to appoint members who are more likely to support his position, which favors aggressive interest rate cuts.

So far, White House Economic Adviser Kevin Hassett has emerged as the front-runner for the position, though there are questions about which spot at the Federal Reserve he could fill. Other possibilities for the role include current Federal Reserve Governors Christopher Waller and Michelle Bowman, as well as former Fed Governor Kevin Warsh and BlackRock Senior Managing Director Rick Rieder.

Will Powell, Miran, and Cook Stay in 2026?

One question is whether Powell will stay on the board after his term as chair ends. Powell’s term on the board of governors doesn’t expire until 2028, which means Powell could stay as a voting member of the Federal Open Market Committee (FOMC), even if he isn’t leading the meetings. Traditionally, Fed chairs leave the board after their leadership term expires, but Powell hasn’t said whether he intends to remain on the board.

There’s also the question of what will happen with current board member Stephen Miran, whose term ends in January 2026. Miran has consistently advocated for aggressive interest rate cuts during his term on the board. He is serving the remaining term of former Governor Adriana Kugler and could return to his role as chairman of the White House Council of Economic Advisers, which he left to take the short-term appointment as a Fed governor.

The board makeup could change even further if Trump is able to successfully fire Governor Lisa Cook, who is challenging the president’s attempts to remove her from her position in court. Wells Fargo economists rated Cook as more likely to support interest rate cuts, so Trump’s moves to replace her may not yield a significant voting change on the FOMC.

Changes in Regional Governor Voting May Not Alter FOMC’s Path

While new appointments may offer Trump a chance to steer the influential economic institution, there may not be a lot of room on the board to significantly change the direction of the central bank that has already begun moving to lower interest rates.

“Even with the transition to a new Fed Chair in the second quarter of 2026, we expect the Fed’s reaction function to be roughly unchanged as most of the Committee itself will remain in place well into 2027,” said Seth Carpenter, Morgan Stanley chief global economist.

Other voting changes are coming to the FOMC, which includes a rotating group selected from the 12 regional bank presidents.

Rotating in as FOMC voters are Cleveland’s Beth Hammack, Dallas’ Lorie Logan, Minneapolis’ Neel Kashkari, and Philadelphia’s Anna Paulson. They will take the voting spots held in 2025 by Kansas City’s Jeff Schmid, St. Louis’ Alberto Musalem, Boston’s Susan Collins, and Chicago’s Austan Goolsbee. 

The rotation of new FOMC voters may not result in much change of direction, as a review by Wells Fargo economists showed that the replacements largely hold similar views on interest rates as their predecessors.

New President Coming in Atlanta

There will be at least one new regional bank president in 2026. Atlanta Fed President Raphael Bostic said he will not seek to stay on at the conclusion of his term in February 2026.

The U.S. president doesn’t have a direct role in appointing regional bank presidents, who are selected by each bank’s board of directors through an executive search process. The Atlanta Federal Reserve president doesn’t have a voting role on the FOMC again until 2027.