President Barack Obama‘s three latest picks for the Federal Reserve Board, including Vice Chairman Stanley Fischer, have been sworn in just in time to participate in a two-day policy meeting this week.
Former Treasury official Lael Brainard was also sworn in Monday, along with Jerome Powell, who has been reappointed for a second term at the board. The oaths were administered by Fed Chairwoman Janet Yellen in the Fed board room, the central bank said Monday. The Fed’s influential Washington-based board, which directs the country’s interest rate policy, is now operating with five members out of the seven that would comprise a fully-staffed board of governors.
The Fed has been gradually winding down its controversial bond-buying program, aimed at keeping long-term borrowing costs down–and is expected to cut it back by an additional $10 billion in monthly purchases at this week’s meeting, which concludes on Wednesday.
The Fed will also release a new round of quarterly forecasts, which are closely-watched for clues to the path of interest rates. Ms. Yellen will hold a press conference after the meeting’s conclusion.
U.S. official interest rates have been effectively at zero since December 2008 as the Fed responded aggressively to a deep recession and a historic financial crisis. In addition, the central bank has bought over $3 trillion in mortgage and Treasury bonds in an effort to continue stimulating economic activity while rates are at zero.
The U.S. Senate approved the three presidential nominations last week.
Mr. Fischer brings a wealth of policy experience to the job. A dual citizen of the U.S. and Israel, he led the Israeli central bank between 2005 and 2013. He was also a vice chairman of Citigroup between 2002 and 2005 and deputy managing director of the International Monetary Fund from 1994 through 2001. During that period, Mr. Fischer earned his crisis-management experience, overseeing the Fund’s sometimes-controversial response to debacles such as the Mexican peso crisis and the Asian financial meltdown.
Ms. Brainard also has a strong international background, having served most recently as President Obama’s undersecretary for international affairs at the U.S. Treasury.
The Fed faces a growing debate over when to begin raising interest rates as the economy recovers. Board governors also play a key role in regulatory tasks, which have multiplied as regulators implement financial reforms mandated by the Dodd-Frank Act.
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16 June 2014 | 3:03 pm – Source: blogs.wsj.com