If confirmed by the Senate, Mr. Clarida would be part of the Fed’s leadership troika, along with Mr. Powell and John C. Williams, who will have a seat on the central bank’s policymaking board as the incoming president of the Federal Reserve Bank of New York.
Mr. Powell, who succeeded Janet L. Yellen, has been a Fed governor, a partner at the Carlyle Group and a Treasury official under President George Bush. Mr. Williams, an academic economist, currently leads the Federal Reserve Bank of San Francisco.
Mr. Clarida, 60, served as assistant Treasury secretary for economic policy from 2002 to 2003. For more than a decade, he has been a global strategic adviser for the investment giant Pimco. His academic work includes research papers on exchange rates, inflation and optimal monetary policy.
His nomination won quick applause from Fed watchers and some economists, who cast him as a serious thinker unlikely to radically pull the central bank away from its gradual approach to raising interest rates as the economy continues to heal from the financial crisis.
“Rich Clarida is an outstanding monetary economist whose knowledge of monetary policy and international finance will add greatly to the Fed in this most interesting time,” said R. Glenn Hubbard, the dean of Columbia’s business school and a former chairman of the second President Bush’s Council of Economic Advisers. “In addition, Rich’s knowledge of and experience in financial markets will make him a valuable colleague for Chairman Powell.”
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Tim Duy, a University of Oregon economist and the writer of the Fed Watch blog, said in an email that Mr. Clarida was “a solid pick — a respected academic economist plus market experience via Pimco plus government experience.”
“I don’t think every position needs to be filled by a trained macroeconomist, but given the nature of the job, I think there needs to be a heavy dominance of trained macroeconomists,” Mr. Duy said. “I think he fits within the current consensus as well so, like the elevation of Williams, represents largely a maintenance of the status quo, at least for now.”
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Tony Fratto, a former colleague of Mr. Clarida’s at the Treasury Department, said the nominee’s positions were always driven by data.
“He’s a traditional conservative Republican economist,” Mr. Fratto said. “You’re not going to find a lot of controversial positions from him. You’re not going to find him saying things that are particularly ideological. He’s just a strong policy guy.”
The post to which Mr. Clarida was nominated had been vacant since Stanley Fischer, an appointee of President Barack Obama, stepped down in October.
One thing his nomination will not do is bring diversity to the Fed’s leadership team, which is all-male and all-white — a complaint liberal groups made about the New York Fed’s selection of Mr. Williams. But the reaction to Mr. Clarida’s selection among Fed critics was reserved.
“Like all nominees, Clarida should be vetted thoroughly for his commitment to the full-employment mandate and to regulating banks to avoid another financial crash,” said Shawn Sebastian, the director of the Fed Up campaign, a coalition of labor and other liberal groups that have pushed the Fed to keep interest rates low to aid job creation.
Ms. Bowman, 46, would increase gender diversity on a board that includes only one other woman, Lael Brainard, along with Mr. Powell and Randal K. Quarles, the Fed’s vice chairman for supervision. Mr. Trump has also nominated Marvin Goodfriend, an economist at Carnegie Mellon University, to the board — although his confirmation is in question in the Senate.
Like Mr. Clarida, Ms. Bowman is a veteran of the second Bush administration, where she worked for the Federal Emergency Management Agency and the Department of Homeland Security. Before returning to her native Kansas in 2010, she led a government and public affairs consulting company in London.
Senator Sherrod Brown of Ohio, the top Democrat on the Senate Banking Committee, said he looked forward to hearing more from the nominees, but suggested that he would want assurances that neither would participate in the Trump administration’s rollback of financial regulations established after the 2008 financial crisis.
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“I hope Mr. Clarida and Ms. Bowman don’t have the same collective amnesia that plagues many in this administration,” he said.
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Article source: https://www.nytimes.com/2018/04/16/business/economy/federal-reserve-richard-clarida.html?partner=rss&emc=rss
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