Word through the forex grapevine is that the U.S. Federal Reserve will be welcoming three new central bank officials while two policymakers are set to leave. Will this tip the scales in favor of the hawks or the doves? Let’s get to know the new Fed kids on the block to find out!
More than a week ago, the U.S. Senate already approved the nomination of former Bank of Israel Governor Stanley Fischer as part of the Federal Reserve Board of Governors. Lawmakers are still set to vote on his nomination as Fed Vice Chairman, giving him the second most powerful position in the U.S. central bank next to Fed head Janet Yellen.
Mr. Fischer has plenty of experience when it comes to dealing with an economic crisis, as he spent more than a couple of decades working with global policy as a World Bank chief economist, IMF official, and central bank governor. This is probably why Yellen has strongly supported his nomination as her wingman, which would put him in charge of the central bank’s communication strategy. Even President Obama himself called him “one of the world’s leading and most experienced economic policy minds.”
He holds a doctorate in economics from the MIT and has worked as an associate professor back in 1973, during which he taught former Fed head Ben Bernanke and current ECB Governor Mario Draghi.
As former U.S. Treasury undersecretary for international affairs, Lael Brainard has been one of the government’s top strategists in pushing for global economic rebalancing. In particular, she has urged China and Europe to adopt more flexible exchange rate systems and fiscal policies in order to spur domestic growth.
Apart from her stint in the U.S. Treasury under the current government, Brainard has also served as deputy director for the National Economic Council under the Clinton administration. During this time, she was appointed one of the top advisers during G8 meetings and was involved in the U.S. response to the Mexican and Asian financial crises. Oh, and did I mention that she holds masters and doctoral degrees in economics from no less than Harvard University?
Also awaiting Senate confirmation is Jerome Powell, who is already part of the Fed as he stepped in to fill an unexpired term a couple of years back. He has worked as a Treasury official under the Bush administration and is now nominated for a full 14-year term on the Fed.
Prior to joining the Fed in 2012, Powell spent a few years as a lawyer and as an investment banker. He also worked at the Bipartisan Policy Center in Washington where he focused on fiscal issues. As assistant secretary and as undersecretary of the U.S. Treasury under then Secretary Nicholas F. Brady (Nope, the guy in Homeland is Nicholas BRODY), Powell was in charge of policy for financial institutions and the Treasury debt market.
With that, economic analysts are expecting to see a more hawkish Fed, as Cleveland Fed President Sandra Pianalto and Dallas Fed President Richard Fisher are scheduled to step down. Of course the nominations of Brainard and Powell are still pending Senate approval, but the odds are that they would be able to secure seats at the Fed table.
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