Janet Yellen became the first woman in a hundred years to head the Federal Reserve. The Senate’s confirmation of Yellen is historic. Now the questions is, who will President Obama nominate as Vice Chairman of the Fed? The seven members of the Board of Governors of the Federal Reserve are nominated by the president and confirmed by the Senate. Currently, with the exit of Ben Bernanke, there will be two open jobs for Board members.
Earlier in December, Israel’s channel 2 reported that Stanley Fischer is the leading candidate to replace Yellen. Bloomberg news also claimed that a “person familiar” with the political nominating process knew Fischer to be Obama’s leading candidate.
Fischer, 70, has impressive credentials. He has held positions in both the private and public sectors including Chairman of Citigroup, First Deputy Managing Director of the International Monetary Fund, Head of the Economics Department at MIT, Chief Economist at the World Bank, and most recently head of the Bank of Israel.
When asked about the congruence of Yellen and Fischer’s fiscal policies, John’s Hopkins economic professor Jonathon Wright said, “they would be on the same page as regards policy” and their leadership “would be the best possible” for the Fed. Wright said Fischer’s experience in the intersection of international economies, financial crises, and macroeconomics would complement Yellen’s background in labor and macroeconomics. If nominated by the White House, the Federal Reserve would continue in its current direction and avoid strictly laissez faire economic policies.
While most have focused their attention on Fischer, there is more than one vacancy on the Board of Governors. According to people familiar with the political process, Lael Brainard is a potential nominee. Brainard serves as the U.S. Department of the Treasury’s Undersecretary for International Affairs. If nominated in conjunction with Fischer, the Obama administration would get a strong knowledge base in international economic affairs.