Last Wednesday, when the Federal Reserve announced its “giant” rate cut, 50 basis points at a time, one detail caught the attention of pundits: the decision was not unanimous. One of the Fed’s governors, Michelle Bowman, voted against it, betting on a “mere” 25 basis point cut. Since then, all eyes have turned to the leader of the central bank’s “hawks,” a Republican who makes no secret of her political sympathies and who has one of the longest political careers of any senior central bank official.
Fed bankers make no secret of their political affiliations, but The vast majority come from universities and above all they demonstrate the independence of the central bankits political aspects are therefore practically unimportant. Jerome Powell got his start in politics as an assistant to a Republican senator in the 1970s, which was no obstacle for a Democratic president, Barack Obamaappointed him Fed governor. His decisions publicly upset another Republican president, Donald Trumpwho spent years complaining about every interest rate hike.
Of the 7 current governors, Only two have a clearly political profile. One is the Vice President of Surveillance, Michael Barrwho worked at the Treasury Department under Bill Clinton and Obama, and was a lead author of the Dodd-Frank financial regulation law that the latter president approved in response to the 2008 crisis. Archerwhich is notable for the fact that his first 15 years of career had nothing to do with economics but everything to do with politics.
“Miki” Bowman, as he was known until his appointment to the Fed, began his career as a intern for Senator Bob Dole, Republican presidential candidate in 1996. After his electoral defeat, he went to the other wing of the Capitol, to the House of Representatives, as Transportation and Government Oversight Advisor of the Republican group. And after George Bush Jr.’s victory in 2000, he became head of Home Affairs: first at the Emergency Management Agency, then as Deputy Secretary of the Department of Homeland Security, the “Department of the Interior” created by Bush.
From there she went with her husband to London, where she founded her own consulting firm. But even there he did not abandon his political activism: during this period led the British Republicans Overseas Group. In 2008, the Associated Press interviewed her on election night, wearing pins supporting John McCain and lamenting Obama’s victory. At the time, Bowman seemed more likely to become a Republican congressman than a Fed member.
But his career changed in 2010, when his family invited him to return to the United States. Specifically, to Kansas, where the Bowmans owned a bank, Farmers and Herdsmen Bank (“Farmers and Shepherds Bank”), a small local entity that today barely exceeds 200 million in assets. ‘Miki’ entered directly as Vice President, Regulatory and Compliance. A position in which he had to take a crash course in learning the Fed’s rules and how to follow them.
After seven years, a controversial Republican governor of Kansas, Sam Brownback, chose Bowman to be the State Commissioner for Bankinga regulatory job that involved going back and forth across the table, from filling out paperwork at their behest to bankers. Brownback, who tried to be Liz Truss a decade earlier, passed massive tax cuts that ultimately bankrupted the state, and ended up leaving the Kansas government a year later with his approval in tatters. The disaster was such that voters chose a Democrat to replace him, a surprise in such a deeply conservative state. But Bowman had already been involved in the administration and had attracted the interest of then-President Trump.
So, just a year after she moved from running a bank to regulating it, Trump appointed her as Fed governor in 2018. His decision was controversial: 34 Democratic senators voted againstan extraordinary level of rejection until polarization ended the enormous consensus that once supported appointments to such positions.
Once appointed, Bowman has not attracted much attention and has consistently supported Powell’s decisions, along with other central bank governors. Until this month, she was revealed as the “great hawk”: His dissent was the first in 19 yearsand the first in 30 years in which one of the governors called for a tighter monetary policy than that supported by his colleagues.
Their first statements after the decision revealed their fear of a resurgence of inflation and their confidence that the labor market is stronger than they think. A much more “hawkish” position than that of other governors who have spoken since then, who have left the door open to another “giant” rate cut in November. The question circulating in the Washington bullshit is Whether Bowman is more cautious than others, or whether she believes that such a sharp rate cut could provide an economic boost to Democrats in the final stretch of the elections. In this sense, Powell has more than demonstrated her independence. But doubts hover over the governor who has put her head in the spotlight.
