John Williams, currently head of the Federal Reserve’s regional bank in San Francisco, has been selected to be the next president of the Fed’s New York regional bank, considered the most influential position among the central bank’s 12 regional banks.
The selection was made by the eligible members of the New York Fed’s board of directors and approved by the Fed’s board in Washington. Even before the official announcement Tuesday, the choice had generated controversy. Opponents said the search process had failed to come up with a candidate who would diversify the top ranks of the Fed system, which is heavily dominated by white males.
Williams, 55, has spent most of his working life in the Fed system, becoming president of the San Francisco Fed in 2011, succeeding Janet Yellen.
He will take over for William Dudley, who announced last year that he planned to step down this summer. Dudley’s last day will be June 17, and Williams will take over on June 18, the New York Fed said in an announcement.
“After a thorough process, my fellow search committee members and I felt that John best fulfilled the criteria we’d identified as well as the feedback received through our public outreach efforts,” said Sara Horowitz, founder of the Freelancers Union and chair of the New York Fed’s board of directors and co-chair of the search committee.
Williams said that he was honored to be chosen lead the New York Fed and “represent the diverse needs and economic challenges of all people living and working” in the New York Fed district.
But Shawn Sebastian, director of the Fed Up Coalition, a collection of liberal groups, said the New York Fed search process had failed in its job to offer diverse candidates.
“The New York Fed’s claims that there are no qualified candidates who are women or people of color working in the public interest who would take this job are untrue,” he said in a statement.
At the moment, the 12 Fed regional banks have only two women presidents, Loretta Mester in Cleveland and Esther George in Kansas City. Last year, Raphael Bostic became the first African-American to lead a Fed regional bank when he was chosen as president of the Atlanta Fed.
A number of New York officials including New York City Mayor Bill de Blasio had also raised concerns about a lack of diversity in the search process.
“The New York Fed has never been led by a woman or a person of color and that needs to change,” Sen. Kirsten Gillibrand, D-New York, said in a recent statement.
But Yellen, the first woman to serve as Fed chair, said Tuesday that she strongly supported Williams’ selection for the New York job. During Yellen’s four years leading the Fed, Williams was viewed as an ally who supported her cautious, gradual approach in raising interest rates.
“He is a distinguished economic who has made major contributions to the formulation of monetary policy,” Yellen said in a statement.
The president of the New York Fed has a permanent vote of the central bank’s rate-setting Federal Open Market Committee, which is composed of Fed board members in Washington and the Fed’s regional bank presidents.
The president of the New York Fed serves as the vice chairman of the panel and has a permanent vote on interest rates. The other 11 regional presidents participate in the discussions but vote on a rotating basis, with only four of the other presidents able to vote in any given year.
The president of the New York Fed also plays a critical role in serving as the Fed’s liaison to Wall Street.
Williams, who earned a doctorate in economics from Stanford University, is viewed as one of the country’s top experts on monetary policy. He will take over as vice chairman of the FOMC at a time when the seven-member Fed board in Washington has four openings.
President Donald Trump selected board member Jerome Powell to succeed Yellen as Fed chairman in February. He has yet to nominate anyone for the job of vice chairman of the Fed board, which came open in October when Stanley Fischer stepped down.