According to people familiar with the matter, as the longest-serving policymaker at the Federal Reserve nears retirement, internal discussions have arisen over the rules governing term limits for regional Fed leaders.

Fed officials are examining whether New York Fed President John Williams can serve until June 2028, when he would complete 10 years in his current role, or whether internal rules require him to step down in June 2027 when he turns 65.

Fed watchers — and Williams himself — have long interpreted the relevant rules as allowing him another year and a half in office. If Williams departs next year, it would give Fed Chairman Kevin Warsh an opportunity a year earlier to influence the appointment of the most important regional Fed leader.

Williams said last month that he expects to serve until June 2028. A spokesperson for the Fed's Board of Governors declined to comment on when Fed leadership believes Williams must leave. Pat Wang, chair of the New York Fed's board of directors, which is responsible for appointing the New York Fed's leadership, also declined to comment through a spokesperson.

The New York Fed president holds a unique and important position within the regional Fed system, with a permanent vote on the Federal Open Market Committee (FOMC), which sets interest rate policy. The role also serves as the Fed's "eyes and ears" on Wall Street and plays a key role when the central bank responds to financial crises.

People familiar with the matter said it remains unclear whether Warsh or any officials on the Fed's Board of Governors would support ending Williams' tenure earlier than he expects. Pushing for Williams' early departure could provoke opposition from other regional Fed leaders, who may worry about further intervention from Washington in their operations.

The New York Fed's board of directors has not yet formally announced the start of the search process for the next president, a process that typically takes months.