Janet L. Yellen
Obama appointed Yellen to be vice chair of the Fed, and she surpasses other potential candidates because of her sheer experience. She spent three years as a Fed governor in the 1990s and six as president of the San Francisco branch of the central bank, and she has been Bernanke’s No. 2 since 2010. She has a reputation as a monetary “dove” who is more concerned about unemployment than inflation, and that may unnerve markets (and Senate Republicans).
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WASHINGTON — The Federal Reserve is torn over when to slow its aggressive efforts to stimulate the economy.
Several Federal Reserve policymakers this month favored slowing the Fed’s efforts to maintain record-low long-term interest rates as early as June.
Roger Ferguson
He was vice chairman of the Fed for seven years under Alan Greenspan and has since worked in the financial sector (though, crucially, not for one of the giant banks that received a government bailout; he is chief executive of financial services group TIAA-CREF). He would bring deep insight to the Fed’s expanded role as overseer of the financial system but would probably draw fire for having overseen bank supervision at the Fed during an era of deregulation in the years leading up to the crisis.
Timothy F. Geithner
The Treasury secretary has made it clear that he is stepping down in January. After a long career in government (including as president of the New York Fed), he may be looking to make some money and enjoy a less demanding schedule. But he will have been out of public office for a year when Bernanke’s term is up, and Obama has a great deal of trust in him.
Other possibilities are below the line — interesting to talk about or think about, but with some weakness that will make it tougher to end up in the job.
Bill Dudley. The New York Fed president has been among Bernanke’s closest collaborators in recent years (along with Yellen). In some ways, he seems like a logical fit for the job: He is a smart economist who understands markets. But before joining the New York Fed in 2007, Dudley spent 21 years at Goldman Sachs, including as its chief economist. In the hothouse political environment of the financial-crisis aftermath, that fact, combined with general antagonism toward the Wall Street bailouts he helped engineer, would make Senate confirmation no easy task.
Don Kohn retired as Fed vice chair in 2010 and has been spending his time at the Brookings Institution and serving on the Bank of England’s financial policy committee. He is deeply respected among central bankers, with an adept sense of the monetary policy and financial regulation sides of the operation. But he, too, was deeply involved in the financial bailouts, and he turns 70 next month.
Obama-appointed Dan Tarullo became a Fed governor in 2009 and has led the bank supervision side of the central bank since. But even if Obama wants a Fed chair to have a stronger focus on regulatory matters, Tarullo could be a tough sell in the Senate. The banking industry does not care for him and would probably lobby against confirmation, and he has clashed with Senate Republicans. It is telling that Obama has left a newly created “vice chairman for supervision” job at the Fed vacant since it was created in the Dodd-Frank Act rather than formally appoint Tarullo to the job that he already does in practice.
The Fed doves have become an increasingly vocal group that has gotten results in steering the central bank toward easing monetary policy to address high unemployment. The question for Charles Evans, Eric Rosengren and John Williams, presidents of the Fed branches in Chicago, Boston and San Francisco, is whether Obama thinks they have the stature and experience to merit consideration for the top job. Similarly, Adam Posen distinguished himself as the resident dove on the Bank of England Monetary Policy Committee in a three-year term that recently ended; he is an American who is set to become president of the Peterson Institute for International Economics on Jan. 1.
American exceptionalism probably makes the idea a non-starter, but if Obama wants to look elsewhere for an accomplished central banker, he could do a lot worse than looking north. Mark Carney, the governor of the Bank of Canada, has presided over sound bank regulation and adept monetary policy that has given that nation one of the world’s strongest economies. That has been enough to cause his name to surface in discussions as to who might be the next governor of the Bank of England. (So, too, has the name of Glenn Stevens, governor of the Reserve Bank of Australia, according to British news reports last weekend.) It is, of course, hard to imagine U.S. politicians being open to the idea of a non-American in a top government job.
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