|
 Fischer, an experienced crisis manager and one of the world's most
prominent economists, would succeed Janet Yellen, who is set to take
the Fed's helm when Chairman Ben Bernanke's term expires at the end
of this month.
Obama also nominated Lael Brainard, who recently was the U.S.
Treasury's top official for international affairs, to serve on the
Fed board, and renominated Fed Governor Jerome Powell, whose current
term ends on January 31.
All three need to be confirmed by the Senate.
The two new voices at the Fed's table are unlikely to alter the
policy consensus as the central bank scales backs it aggressive
bond-buying campaign, analysts said.
While Brainard, a veteran of Democratic administrations, is seen as
inclined to be particularly focused on fostering faster jobs growth,
Fischer, whose post as second-in-command will make him more
influential, is seen as a centrist.
But Fischer, 70, is also known for a willingness to do what he
thinks best, regardless of economic rules or market expectations. As
head of Israel's central bank, he often surprised investors with his
interest rate decisions.
"Like Janet Yellen and many others, he is of unquestioned brilliance
at knowing when and when not to pay attention to academic concerns
or models," said Adam Posen, president of the Peterson Institute for
International Economics.
Some Fed watchers wonder whether there might be tensions between
Yellen and the strong-willed Fischer, who will both serve four-year
terms, if differences on policy arose.
Laura Tyson, a professor at University of California, Berkeley, who
is close to Yellen, downplayed those concerns.
"Janet and Stan have had a close professional relationship over many
years," she said. "They will work terrifically together as a team."
The author of a widely used textbook on macroeconomics, Fischer has
taught many of the leading lights of the profession, including
Bernanke and European Central Bank chief Mario Draghi.
As the top deputy at the International Monetary Fund from 1994-2001,
he played a key role in battling the Asian financial crisis.
More recently, Fischer, who has both U.S. and Israeli citizenship,
was credited with helping Israel safely navigate the shoals of the
2007-2009 financial crisis. He stepped down as governor of the Bank
of Israel in June, three years into his second five-year term.
His lengthy experience battling economic crises and his
international expertise could be important assets at the Fed.
Brainard, 51, also brings a wealth of international experience.
As undersecretary of the Treasury for international affairs for
3-1/2 years, she was a big player in U.S. efforts to push China
toward a more-flexible currency and frequently pressed Europe to
tackle its debt crisis more aggressively.
[to top of second column] |
Previously, she had served as deputy director of President Bill
Clinton's National Economic Council, focusing on international trade
and financial policy.
Powell, 60, is a domestic finance expert. He served as a top
Treasury official under President George H.W. Bush. When he was
originally nominated by Obama to the Fed in 2011, the move was seen
as a way to mollify Senate Republicans.
WORK AHEAD
The picks would fill out the normally seven-member Fed board, which
is the nucleus of U.S. monetary policymaking.
But Obama is likely to have another vacancy to fill soon. Fed
Governor Sarah Bloom Raskin is awaiting Senate confirmation to be
the No. 2 official at the U.S. Treasury.
Last month, the Fed decided to trim its monthly bond purchase pace
to $75 billion from $85 billion, with an eye toward shuttering the
program by late in the year.
Yellen has been a strong advocate of the central bank's aggressive
actions to stimulate the economy through low interest rates and
large-scale asset purchases.
Even so, economists expect Yellen to continue to wind down the
bond-buying program, although a report on Friday that showed
unexpectedly weak U.S. job growth in December put a question mark
over how quickly the Fed might move.
In tapping Fischer, who taught at the Massachusetts Institute of
Technology for many years, Obama has chosen someone whose economic
credentials are beyond reproach.
But Fischer's recent job as chief of a foreign central bank, and his
stint in the mid-2000s as vice chairman of Citigroup, which later
required a government bailout, could constitute red flags for the
senators who need to confirm him.
Fischer was born in present-day Zambia, where his parents, Jewish
immigrants from Eastern Europe, ran a general store. When he was 13,
his family moved to what is now Zimbabwe. He took an economics
course in high school, and was hooked for life.
He went on to study at the London School of Economics and then MIT.
At MIT in 1977, he wrote an influential paper arguing that monetary
policy can effectively boost employment.
(Reporting by Mark Felsenthal in
Washington and Ann Saphir in San Francisco; additional reporting by
Krista Hughes in Richmond, Virginia; editing by James Dalgleish and
Chizu Nomiyama)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
