Bowman's past remarks on treasury-tied capital plan resurface this week
The comments follow this week's stress test overhaul and sit apart from the live debate over an October rate move
Published
Federal Reserve Governor Michelle Bowman has, in a series of past speeches, backed changes that tie the central bank's capital framework more closely to Treasury holdings. In a speech on September 26, 2025, she said she strongly supports having the Fed's securities portfolio consist only of Treasury securities, arguing this limits the central bank's effect on how credit is allocated across the economy.
In a later speech on February 19, 2026, Bowman said changes to the leverage ratio stop it from becoming a binding constraint that would discourage banks from holding Treasury securities. On September 18, 2026, she said the Fed's Board expects to finalize reforms to risk-based capital requirements for large and small banks, along with changes to the G-SIB surcharge, before the end of the year.
The remarks resurface in the same week the Fed finalized changes to its annual bank stress tests. The final rule, adopted Wednesday, closely follows the version proposed earlier this year and is meant to reduce swings in bank capital requirements from one year to the next.
That stress test finalization has already set the regulatory capital conversation for banks this week, separate from the dispute over Fed building costs that has drawn calls from President Trump for Chair Powell's resignation, a fight over Fed leadership rather than capital rules. None of this touches the question now dividing bank-sensitive assets: whether the Fed raises rates again in October, after traders swung from pricing three hikes to even odds and back following a stronger payrolls report and a softer reading on the PCE price index. Capital rule commentary remains secondary to that rate path, which is still the main driver of bank funding costs and credit demand.