bobbyw24
03-01-2010, 03:06 PM
Fed Vice Chairman Kohn to leave in June; gives Obama opening
By Neil Irwin
Washington Post Staff Writer
Monday, March 1, 2010; 1:05 PM
The No. 2 official at the Federal Reserve announced he will step down in June, creating a key vacancy at the central bank and setting the stage for President Obama to reshape the leadership of the Fed.
Fed Vice Chairman Donald L. Kohn will retire June 23, according to a letter he submitted to Obama on Monday morning. His term as vice chairman ends that day, though Kohn, 67, could have elected to remain at the Fed as a governor through 2016.
The president's authority to appoint senior officials at the Fed is one of the executive branch's most important powers when it comes to economic policymaking. Obama now has three vacancies to fill: Two of seven Fed governor positions are also open, as they have been since before he took office.
The White House has taken preliminary steps to draw up lists of candidates for the Fed jobs, but no appointments are imminent, said sources who have been in contact with the White House. The president is seeking one or two strong macroeconomists, these sources said, and one person with a strong financial markets background.
Once the positions are filled, Obama will have appointed five of seven governors. (He named Ben S. Bernanke to a second term as chairman in August, and appointed Governor Daniel Tarullo, a banking expert, upon taking office).
Newly appointed governors probably would have even more power to influence economic policy than usual. When the Fed eventually scales back the measures it imposed during the financial crisis, the central bank's leaders intend to use an unconventional tool, raising the interest rate paid on bank reserves, to pull money out of the economy. Decisions on that interest rate are made by the Board of Governors, not the Federal Open Market Committee, a bigger group that includes presidents of regional Fed banks and makes most monetary policy decisions.
http://www.washingtonpost.com/wp-dyn/content/article/2010/03/01/AR2010030101139.html?hpid=topnews
By Neil Irwin
Washington Post Staff Writer
Monday, March 1, 2010; 1:05 PM
The No. 2 official at the Federal Reserve announced he will step down in June, creating a key vacancy at the central bank and setting the stage for President Obama to reshape the leadership of the Fed.
Fed Vice Chairman Donald L. Kohn will retire June 23, according to a letter he submitted to Obama on Monday morning. His term as vice chairman ends that day, though Kohn, 67, could have elected to remain at the Fed as a governor through 2016.
The president's authority to appoint senior officials at the Fed is one of the executive branch's most important powers when it comes to economic policymaking. Obama now has three vacancies to fill: Two of seven Fed governor positions are also open, as they have been since before he took office.
The White House has taken preliminary steps to draw up lists of candidates for the Fed jobs, but no appointments are imminent, said sources who have been in contact with the White House. The president is seeking one or two strong macroeconomists, these sources said, and one person with a strong financial markets background.
Once the positions are filled, Obama will have appointed five of seven governors. (He named Ben S. Bernanke to a second term as chairman in August, and appointed Governor Daniel Tarullo, a banking expert, upon taking office).
Newly appointed governors probably would have even more power to influence economic policy than usual. When the Fed eventually scales back the measures it imposed during the financial crisis, the central bank's leaders intend to use an unconventional tool, raising the interest rate paid on bank reserves, to pull money out of the economy. Decisions on that interest rate are made by the Board of Governors, not the Federal Open Market Committee, a bigger group that includes presidents of regional Fed banks and makes most monetary policy decisions.
http://www.washingtonpost.com/wp-dyn/content/article/2010/03/01/AR2010030101139.html?hpid=topnews