President Barack Obama will nominate Stanley Fischer, the former head of the Bank of Israel, to be vice chair of the Federal Reserve, and also tapped two other people for seats on the central bank’s Board of Governors, the White House said Friday.
Lael Brainard, who recently stepped down as Treasury undersecretary for international affairs, was chosen to fill one of the vacant seats on the seven-member Fed board.
And Jerome H. Powell, a former Treasury official and investment banker who has served on the Fed board since 2012, will be renominated. Powell was confirmed to an unexpired term that expires on Jan. 31.
“These three distinguished individuals have the proven experience, judgment and deep knowledge of the financial system to serve at the Federal Reserve during this important time for our economy,” Obama said.
The nominations, which had been expected, add to the major changes coming at the Fed as it tries to pull back on its aggressive stimulus efforts without damaging the economic recovery.
Current vice chair Janet L. Yellen was confirmed this week to replace Ben S. Bernanke, whose second four-year term as central bank chair expires Jan. 31. She will lead a different, and potentially more fractious, Fed policy-making team.
This month, four new regional Federal Reserve Bank presidents will rotate into the 12 voting positions on the Federal Open Market Committee, or FOMC, which sets monetary policy. All seven Fed governors are voting members.
Friday’s disappointing government report showing the economy created just 74,000 net new jobs in December highlighted the difficulties for Fed policymakers. They must decide if the economy is strong enough to continue the reduction started last month in the Fed’s bond-buying stimulus program, when most data pointed to an improving labor market.
Fischer, who was governor of the Bank of Israel from 2005-2013, is a legendary economist who brings a wealth of experience to the Fed board.
He has worked at the World Bank and the International Monetary Fund, and was vice chairman of Citigroup Inc. from 2002-2005.
Fischer was the Ph.D. advisor for Bernanke at the Massachusetts Institute of Technology. Fischer also taught European Central Bank president Mario Draghi and former Treasury Secretary Lawrence H. Summers.
If confirmed by the Senate, Fischer would replace Yellen as the Fed’s No. 2 official.
“He is widely acknowledged as one of the world’s leading and most experienced economic-policy minds, and I’m grateful he has agreed to take on this new role and I am confident that he and Janet Yellen will make a great team,” Obama said.
Brainard also brings international experience to the Fed. And she helps close a pending gender gap on the central bank’s board. Elizabeth Duke stepped down last year, and Sarah Bloom Raskin is awaiting confirmation as deputy Treasury secretary.
If Raskin departs as expected, Yellen would be the only woman remaining on the board.
Obama said Brainard’s “knowledge of international monetary and economic issues will be an important addition to the Fed.”
Powell served as an assistant secretary and undersecretary at the Treasury Department under President George H.W. Bush.
Fed governors have 14-year terms, but rarely serve all of it. Powell is nominated to a full 14-year term. Fischer would fill a term expiring in 2020, and Brainard one expiring in 2026.