Why can Kevin Warsh be appointed again at the Fed ?

Fed governors are appointed to non-renewable 14-year terms. And Kevin Warsh has already served on the Board of Governors between 2006 and 2011.

The saga over Jerome Powell's succession is finally over. Former Fed governor Kevin Warsh (2006-2011) has been selected by Donald Trump.

But how can he be appointed again to the Board of Governors, when he has already spent five years there?

The term matters

When he was appointed in 2006, Kevin Warsh took over an unexpired term that was due to end on January 31, 2018. He ultimately resigned in 2011, in disagreement over the Fed's quantitative easing policy.

He was replaced by Jeremy Stein, who in turn resigned in 2014. Then Randal Quarles finished out that term, before himself being appointed to a 14-year term in 2018.

So it is the terms that matter. When a governor is appointed for 14 years, they cannot be reappointed if they complete it. But if they resign before the end, that term must be completed by another governor. That successor, who takes over an unexpired term, can then be appointed to a 14-year term.

Jerome Powell, for example, was appointed in 2012 to finish out a term. Then, when it expired in 2014, he was appointed to a 14-year term. If he serves it out, he will therefore have spent 16 years on the Fed's Board of Governors.

They have to leave now

A governor can therefore remain at the Fed for more than 14 years, given how terms work. Although another situation can extend that tenure.

The US president appoints governors, and the Senate must then confirm the appointment by a simple majority vote. And when a term expires, if a replacement is not appointed and confirmed in time, the governor remains in office until that process is completed.

That is what is happening now. Stephen Miran's term ended on January 31, but he is still in office. This vacant seat will be used by Donald Trump to place Kevin Warsh. But Senate confirmation could take time, notably because of a blockade by North Carolina senator Tom Tillis, who is opposed to any Fed appointment as long as the investigation into Jerome Powell remains under way.

The Fed's next meeting is on March 17 and 18. It is likely that Stephen Miran will still be present.