Inside Kevin Warsh’s selection process for the next Atlanta Fed president

The search for a new president of the Federal Reserve Bank of Atlanta — now entering its seventh month — is being watched carefully for how new Fed Chairman Kevin Warsh intends to reshape the interest rate-setting Federal Open Market Committee.

That process has shifted as Warsh has begun to put his stamp on the Fed. The Fed was considering candidates for Atlanta under then-Chair Jerome Powell, but the selection process was paused in part to allow Warsh to oversee the appointment, two people familiar with the hiring process told CNBC, speaking on condition of anonymity to discuss the ongoing search. Michael Faulkender, a former senior Treasury official under President Donald Trump, was subsequently considered for the position in Atlanta, the people said.

It isn’t clear if Faulkender is still a candidate.

The Atlanta Fed declined to comment on Faulkender or who is under consideration.

“Our committee is conducting a thorough and deliberate search for the next president of the Federal Reserve Bank of Atlanta. We maintain our focus on selecting the best candidate to serve the Sixth District, while protecting the integrity of the process,” Greg Haile, chair of the Atlanta Fed board of directors and presidential search committee, said in an emailed statement. “We will provide relevant updates about this important leadership role when appropriate.”

The Fed and Faulkender declined to comment.

Warsh has promised “regime change” at the Fed, encompassing a rethink of rate-setting and balance sheet policy, communications and what data the Fed uses to gauge the economy. But he inherits a Fed whose membership was shaped by Powell and the chairs before him. Warsh has few immediate opportunities beyond the Atlanta job to bring allies onto the FOMC.

He recently announced five task forces to study what he wants to change. Those will be staffed by outside experts. No current Fed governors or presidents will be included on those task forces.

Warsh comes in facing questions about how independent he’ll be from Trump. But Warsh didn’t acquiesce at his first FOMC meeting last week to Trump’s demands for rapid rate cuts. 

Instead Warsh defied many analysts’ expectations with a hawkish press conference that prompted markets to raise their projections for interest rates.

Warsh could use the Atlanta appointment to further defy expectations and assert his independence from the administration.

The 12 regional Fed presidents are chosen through a back-and-forth process between the directors of the bank and the Board of Governors in Washington. That arrangement is the result of the Federal Reserve Act’s effort to balance the power of the Board in Washington and the influential New York Fed with additional regional representation. 

Typically, the local bank’s directors hire a search firm and come up with a list of candidates. After…